If you have inventory, be it finished goods or work-in-process (WIP), then you have capacity.  I mention this because many of the companies who have inventory also have difficulty delivering on-time.  However, the capacity is being wasted.

Do you KNOW, in your gut, that you have excess capacity but never the less still struggle to get caught up and complete orders on-time?

If you’ve answered yes, then check how much inventory you have – even if it is just WIP.

If you have finished goods inventory and your turns are low, then you are spending your capacity making things that are not yet needed while at the same time, you don’t have enough capacity to produce what is due and needed now.

What are low inventory turns?  If you have much more than a replenishment lead-times worth in stock, then it’s low.  Replenishment lead-time is the sum of your manufacturing lead-time and transportation lead-time.  If you can get or make something in 3 to 4 weeks, why do you only have 4 turns a year?  That is a low turn!

The solution, of course, is to align your production with what your customers are actually consuming.  I’m referring to Theory of Constraints Replenishment.  (If you’re not familiar with TOC Replenishment, comment on this post and let me know you want to learn more.)

And if you manufacture your finished goods inventory, then you probably also have high WIP.

If your WIP is approximately equal to (or greater than) your quoted lead-time (which would constitute high inventory) then you can improve your performance by reducing the amount of WIP you have.

According to Little’s Law there is a direct correlation between the amount of work-in-process we have and our lead-time.  The higher our WIP, the longer our lead-times.

Here’s an illustration showing the relationship between WIP and lead-time:

High WIP = Long Lead-time

The more jobs that wait for their turn the longer the average queuing time, leading to longer production lead-times.  Example 1 has the most WIP and longest lead-time.  And, conversely Example 3 has the least WIP and the shortest lead-time.

So, as you increase WIP, you are also increasing your lead-time, not to mention the amount of cash you have tied up in raw materials.

But Wait, There’s More … On-Time Delivery Decreases

The diagram does NOT include the effect of variability.  But if it did, it would show that the variability of production lead-time is increased as the queue grows.

So the effect of high WIP just gets more dramatic the more variability you have.

This directly reduces the on-time delivery because it is more difficult to predict the exact production lead-time and to confirm orders accordingly.

And … Quality Decreases

High WIP can also have an impact on quality.  Many production failures occur early in the routing, but are detected much later in the production process (usually at final inspection).

If WIP is high, the average lead-time is also high causing a long lag time between the production steps and the final inspection.  That means that the final inspection step occurs a long time after the step that caused the failure.

And because so much time has passed, it can be difficult to determine and correct the root cause of the quality problem, making improvement very difficult.

Thus, the higher the WIP, the harder it is to detect and correct quality problems.

So … Pay Attention to Your Inventory

Inventory is a clue.  Too much inventory is eating up your capacity and causing you to miss due dates or in the case of finished goods causing you not have what’s needed in stock.

Wishing you success,

Dr Lisa

P.S. If you’d like to get a handle on your WIP, due date performance and REALLY improve à check out Velocity Scheduling System for highly custom job shops.

P.P.S.  If you’re a small distributor and want to reduce stock outs with less inventory – reply to this email.  I’m working on a new coaching program for small distributors that includes software.  It’s very INEXPENSIVE (for now).

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Most of the time when I’m doing private consulting, the problem that my clients think they have is NOT actually the real problem.

If you think about it, it makes sense that most people don’t understand their real problem.  Because if they did, they would just fix it.  The fact that the problem still exists is a likely indicator that the real issue has not been addressed.

We know from Theory of Constraints that most people work on the symptoms of their real problem.  And while we understand this intellectually, that doesn’t mean we are immune to working on symptoms.

I’ve given well over 100 Vistage speeches and I’ve spoken to some groups more than once.  Have you noticed that some people report the same problems over and over again?  A year later they are still dealing with the same issues?

Is it possible that YOU are working on your symptoms and are unaware of the real issue?

Let’s check …

As you’re preparing for the new year, what do you want?  What are your goals?  (Write them down.)

Are these things that have been on your list for a while?  Maybe you’ve made some progress toward them but have not truly achieved them.  (Mark the ones that have appeared before.)

If you don’t fully reach your goals or objectives, then it is not only possible, but probable that you’ve been dealing with symptoms and/or don’t have the right approach to improving things.

What you want is always valid.  Your approach to how to get it can be the issue.

My job as a consultant is to provide perspective.  To help clients understand the real problem – the thing that’s blocking them from achieving their goals.

For example, most custom job shops I work with think that to increase due date performance or ship more or increase profits – they need to be more efficient.  They know based on data or in their gut that they have unused capacity.  And so they pursue becoming more efficient – getting better utilization of that capacity.

This sounds logical, doesn’t it?  But why then do they not substantially succeed at increasing profits by shipping more with the same people and resources or getting more on-time?

… because their approach to solving the problems is wrong.  Low efficiency or utilization is a symptom.  Focusing efforts on becoming more efficient often result in little or no benefit or things can even get worse.

Instead, these shops should focus on FLOW.  (Read how a Michigan precision machine shop did this.)

But that’s just an example.  The point is that YOU may be missing the boat to REALLY improving your business.

According to one of the Vistage economists the first half of 2013 will be more of the same.  However, the second half may see some slowing.

NOW is a good time to kick into gear to be strong for whatever the second half of the year has in store.

MAKE it a Happy New Year,

Dr Lisa

P.S.  Leave comments or questions below.

2013 Copyright Science of Business, Inc. ALL RIGHTS RESERVED.

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FOR IMMEDIATE RELEASE

Theory of Constraints Marketing Expert, “Dr. Lisa” Lang, Hits Amazon Best-Seller List with Dan Kennedy

“Dr. Lisa” Lang, Marketing Expert, recently hit five separate Amazon.com best-seller lists with “Marketing Miracles” book, her third best seller.

Green Valley, AZ – September 29, 2012 – “Dr. Lisa” Lang, President of the Science of Business, has joined a select group of the world’s leading marketing experts, along with best-selling author Dan Kennedy, to co-author the book titled Marketing Miracles: Odd, Unusual, Breakthrough Strategies That Build Great Businesses! The book was released by CelebrityPress™   - a leading business book publisher.

Marketing Miracles authors tackle an array of subjects including the most creative strategies and tactics to attract clients and customers…and keep them, as well as guarantee higher sales conversions.  Dr Lisa’s chapter is titled The Ultimate Market Offer – The Mafia Offer. A “Mafia Offer” is an offer so good that your customers can’t refuse it and your competition can not or will not match it. Mafia Offers are NOT unique selling propositions, value propositions or a competitive advantage.  They are not price reductions or based on innovations.

On the day of release, Marketing Miracles, reached best-seller status in five Amazon.com categories – The book reached best-seller status in the Direct Marketing, Marketing Research Business, Marketing, Marketing and Sales, and Small Business and Entrepreneurship categories.

Dr. Lisa is a renown Theory of Constraints (TOC) expert and is the foremost expert in the world for applying Theory of Constraints to marketing. She is regularly sought out for her expertise on developing market offers that increase sales. She has been named a 2012 Trendsetter in the USA Today for her work helping highly custom job shops and machine shops to become more productive, more competitive and to bring manufacturing back to the U.S with Velocity Scheduling System.  Dr. Lisa has also appeared in CNBC, CBS, The Wall Street Journal, and Yahoo Finance to name a few.

Marketing Miracles features some of the newest, the best and, of course, the most extreme ways to deliver your marketing message in the most impactful way possible – all devised by successful business leaders who aren’t afraid to innovate or outrage. Prepare yourself for proven powerful strategies that deliver.

After such a successful release, Dr. Lisa Lang will be recognized by The National Academy of Best-Selling Authors®, an organization that honors authors from many of the leading independent best-sellers lists.

To order a copy of the book, please go to Order Marketing Miracles

To learn more information about “Dr. Lisa” Lang and Mafia Offers, visit http://www.mafiaoffers.com/.

###

Contact:

Dr Lisa Lang

Science of Business, Inc.

www.ScienceofBusiness.com

DrLisa@ScienceofBusiness.com

Keywords:

Dr. Lisa Lang, Dr Lisa, Marketing Miracles, Mafia Offers, Theory of Constraints, Science of Business, Theory of Constraints Marketing, Velocity Scheduling System, Dan Kennedy

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Whenever our human brains detect a sales pitch, our shields naturally go up.  I think of it like the shields that protected the Enterprise in Star Trek.

“Captain, the Romulans have entered our airspace!”

image credit: http://jeffmasterson.wikispaces.com

It’s a natural response because of the way our brains evolved.  The oldest part of our brain is the reptilian brain.  That’s where our fight or flight response comes from.  But it is also that part of our brain that evaluates any sales pitch that comes our way.The reality is that the reptilian brain is the source of your prospects first reaction to your sales pitch, and that part of the brain is very picky about what it pays attention to.  After all its first priority is survival.  It does not have a lot of time to get bogged down with details.

So we are selling to a brain that likes clear, concise facts.  It wants to choose between two easily understood options and it wants you to get to the point fast so it can do it quickly.  PowerPoint presentations typically put our brains to sleep, because this part of our brain is looking for strong summarizing points, points of contrast and/or something unexpected.

To successfully sell or pitch your idea, product, service or anything else you’ll have to keep your prospect’s shields from going up by appealing to your prospect’s reptilian brain.

I combined this concept with the Theory of Constraints Solutions for Sales and the Theory of Constraints Buy-In processes to create a process for presenting Mafia Offers.  (It’s published in Chapter 22, Mafia Offers:  Dealing with a Market Constraint, in the Theory of Constraints Handbook.)

Here’s a short excerpt of where the Theory of Constraints buy-in process is reviewed in light of the reptilian brain:

Agree on the Problem

Since the old reptilian brain is self-centered and concerned with its own survival above all else, it is highly interested in solutions that will alleviate any pain it’s feeling or problems with which it’s dealing. That is why humans spend more time and energy avoiding pain or looking to destroy pain than we devote to gaining higher levels of comfort. Focus on the problems and pain your prospect is experiencing, not the features of your products or service.17

Agree on the Direction of the Solution

Have you noticed that a large portion of all Websites and brochures start with the same sentence, “We are one of the leading providers of …”? Or, they have a picture of their building on the home page. If you’re sitting in a presentation, have you noticed that most start by the presenter expounding on the history of the company?

This blah, blah, blah is the typical way most people approach their market. Such empty claims, neutral statements, or general filling of silence work against you. To reach the old brain you should say (and prove) a contrasted statement because the old brain responds favorably to clear, solid contrast. Powerful, unique solutions attract prospects because they highlight the difference, gap, or disruption the old brain is proactively looking for to justify a quick decision.

Agree the Solution Solves the Problem

Focusing on the unique benefits of your solution is all well and good, but technically it doesn’t prove anything. Remember, the old brain prefers tangible, simple, straightforward information over complicated or abstract concepts. It needs solid proof of how your solutions will enable it to survive or benefit. Since the old brain can’t decide unless it feels secure, you need to concretely demonstrate, not just describe, the gain your prospects will experience from your product or service—the results of a specific solution to their problem—in a way that satisfies the old brain’s need for concrete evidence. So it’s not just about value, it’s about proven value or proven risk reduction.

This has implications not only for our Mafia Offers, but also for how we approach prospects in our emails, Websites, and brochures. There are implications on how we describe the problem, how we describe our Mafia Offer, and how we agree or prove that our offer will provide the results.

 Here’s the NEW news — I’ve done a lot more testing on applying the combination of neuroscience and the Theory of Constraints tools, and they work like a charm together.  So if you’re having trouble selling your products, services, yourself, or your ideas I recommend understanding how to sell to the reptilian brain.

To do that you can read the long list of books I’ve read or let me simplify it for you with some options:

1. Read Neuromarketing: Understanding the Buy Buttons in Your Customer’s Brain
2. Read Pitch Anything: An Innovative Method for Presenting, Persuading, and Winning the Deal
3. Read my Chapter 22 of the Theory of Constraints Handbook.  It provides a short summary and can get you started fast.  It’s 28 pages ($7) and I know your reptilian brain will like that.

Any one of these 3 would get you started.  And just knowing a little about what it takes to keep your prospects shields from going up can go a long way.

Wishing you success,

Dr Lisa

P.S. Please let me know what you think by leaving a comment.

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Lisa Repp wrote her thesis on “Factors that influence critical chain project management implementation success”. A summary of her findings are below as is a link to read the full thesis on Theory of Contraints Critical Chain Project Management (CCPM).

Read all results from Lisa’s thesis pdf at: http://digital.library.wisc.edu/1793/61815

Summary of Results (extracted from thesis abstract) by Lisa Repp

The number of completed survey responses (eighty-six from the targeted group) was sufficient to use statistical analysis techniques to draw some preliminary conclusions. However, the quantity of low-success implementations (twenty), when compared to high-success implementations (sixty-six), is significantly lower. Therefore, survey findings are representative of participants completing the survey only and not necessarily of the entire population of CCPM implementations. Further research needs to be conducted to validate results from this study.

Survey findings indicate that the presence of factors is differentiated between high-success and low-success experiences for multi-project and single-project CCPM implementations. For multi-project CCPM implementations, thirteen factors were identified as having differences in median values between high-success and low-success implementations that were statistically significant with the largest number of significant factors residing in the CCPM features factor group. For single-project CCPM implementations, forty-one factors were identified as having differences in median values between high-success and low-success implementations that were statistically significant with the largest concentration of significant factors residing in the change management factor group. Where possible, multi-project and single-project implementations were combined to determine that eighteen factors had differences in median values between high-success and low-success implementations that were statistically significant; the largest number of significant factors resides in the goals established for CCPM factor group and CCPM features factor group.

The low-success multi-project implementations were similar to high-success implementations in many aspects such that many features were highly implemented and attention was given to using good change management practices. Therefore, the slight differences between high-success and low-success multi-project implementations reveal factors that can be detrimental to success even when there is a concerted effort to do everything right. One such detrimental factor was the presence of resistance to the implementation. Low-success single-project implementations, conversely, were characterized as having low levels of CCPM implemented features, low usage of change management techniques, and a belief that the CCPM method was “too complex.” The comparisons between high-success and low-success single-project implementations, therefore, revealed numerous factors such as goals, CCPM features, and change management techniques that are most essential to achieving success.

Ten interviews were conducted as part of the study. The interviews revealed fourteen new potentially significant factors, twelve of which were common amongst two or more interviewees. The emergence of these new factors suggests that there are other potentially significant CCPM factors that may not be represented in the survey and interview combined. Further research may be able to identify other factors that can contribute to CCPM implementation success.

The survey (via comment boxes) and interview process combined identified new factors to be included in future research into CCPM implementations. The interviews also identified the need for researching sustainment of CCPM in an organization, instead of focusing solely on the implementation. One key factor in such research would be the impact of organizational structure on the sustainment of CCPM in an organization.

Read all results from Lisa’s thesis pdf at: http://digital.library.wisc.edu/1793/61815

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FOR IMMEDIATE RELEASE

 Theory of Constraints Expert Dr. Lisa Lang Signs Publishing Deal Along With Co-Author Dan Kennedy To Release “Marketing Miracles”.

 Dr. Lisa Lang, expert in applying Theory of Constraints to marketing, has signed another publishing deal with CelebrityPress along with marketing legend Dan Kennedy and a select group of experts from around the world to release the book, “Marketing Miracles.”

Green Valley, AZ – June 12, 2012 – Dr. Lisa Lang has joined a select group of the world’s leading experts from a variety of industries along with marketing legend Dan Kennedy to co-author the forthcoming book titled, Marketing Miracles: Odd, Unusual, Breakthrough Strategies That Build Great Businesses. Nick Nanton, Esq. and JW Dicks, Esq. of CelebrityPress are excited to publish their second book with Dr Lisa and are anticipating her 3^rd best seller.

“Dr. Lisa” Lang is a renown Theory of Constraints (TOC) expert and is the foremost expert in the world for applying Theory of Constraints to marketing. Dr. Lisa is regularly sought out for her expertise on developing market offers that increase sales. She has been named a 2012 Trendsetter in the USA Today for her work helping highly custom job shops and machine shops to become more productive, more competitive and to bring manufacturing back to the U.S with Velocity Scheduling System.  Dr. Lisa has also appeared in CNBC, CBS, The Wall Street Journal, and Yahoo Finance to name a few.

Marketing Miracles will feature business and marketing professionals from around the world revealing their top marketing secrets and strategies.  Dr Lisa’s chapter is titled The Ultimate Market Offer – The Mafia Offer. A “Mafia Offer” is an offer so good that your customers can’t refuse it and your competition can not or will not match it. Mafia Offers are NOT unique selling propositions, value propositions or a competitive advantage.  They are not price reductions or based on innovations.

Other topics to be covered in the book include the customer experience, social media marketing, new rules of marketing and analytics, pricing, turning opt-ins into sales and marketing technology, among others. The book is expected to be published later this year.

To purchase on Amazon, click here. 

Dan S. Kennedy is the provocative, truth-telling author of seven popular No B.S. books, thirteen business books total; a serial, successful, multi-millionaire entrepreneur; trusted marketing advisor, consultant and coach to hundreds of private entrepreneurial clients running businesses from $1-million to $1-billion in size; and he influences well over 1-million independent business owners annually through his newsletters, tele-coaching programs, local Chapters and Kennedy Study Groups meeting in over 100 cities, and a network of top niched consultants in nearly 150 different business and industry categories and professions.

About Dr. Lisa Lang:

As the President of Science of Business, Dr. Lisa invented the Mafia Offer Boot Camp developing over 100 Mafia Offers for fortune 100 companies, as well as, for small job shops.  Dr. Lisa worked with Dr. Goldratt, father of the Theory of Constraints, serving as the Global Marketing Director for Goldratt Consulting. During her tenure Goldratt Consulting was the fastest growing consulting company in the world. She has a Ph.D. in Engineering and is a TOCICO certified expert. She is currently an officer on the TOCICO Board of Directors.  Before becoming a consultant, Dr. Lisa worked for Clorox, Anheuser-Busch, and Coors Brewing.

To learn more about Mafia Offers and how you can create your offer in a 2.5 day Mafia Offer Boot Camp visit www.MafiaOffers.com and check out Dr Lisa’s bestselling book Mafia Offers:  Dealing with a Market Constraint. Email Dr Lisa at DrLisa@ScienceofBusiness.com.

About Celebrity Press™:

Celebrity Press™ is a leading business book publisher that publishes books from thought leaders around the world. Celebrity Press™ has published books alongside Jack Canfield, Brian Tracy, Dan Kennedy, Dr. Ivan Misner, Robert Allen and many of the biggest experts across diverse fields. CelebrityPress™ has helped launch over 600 best-selling authors to date.

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Contact:

Rachel Billy

Dicks and Nanton Celebrity Branding Agency®

800-980-1626

Rachel@CelebrityBrandingAgency.com

keywords:

Dr. Lisa Lang, Mafia Offers, Dr Lisa, Theory of Constraints Marketing, Market Offer, TOC Marketing, TOC Mafia Offers, Theory of Constraints, CelebrityPress, Marketing Miracles, marketing, marketing book, business book

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Re-elect “Dr Lisa” Lang to the TOCICO (Theory of Constraints International Certification Organization) Board of Directors.  You must be a TOCICO member to vote.  You will receive an email on June 3rd and vote by June 5th 2012.

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Press release – 2012-04-27

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This Q&A occurred on LinkedIn and was started by Eli Schragenheim, whom I serve on the TOCICO Board of Directors with.  Eli does a great job of explaining the value of attending a TOCICO conference especially after the passing of Dr Eliyahu M Goldratt, the father of Theory of Constraints. 

QUESTION by Eli Schragenheim:  Serving on the board of TOCICO I’m interested in the value people expect from coming to the conference. Considering your personal background what would like to get from the conference?

Employees of an organization might expect different values for them than the value a freelance consultant expects to get. We all like to know more about TOC, but an annual conference is not an educational seminar. If we verbalize the value for us we could achieve more from such a conference – both now and also in the future. Is it getting new ideas? If so, how do we check them after the conference? Is it to get to know people? What type of people would you like to know and what kind of value you expect to get from it in the future? Is there anything that we, the organizers of the annual conference, should do to increase the value of the conference?

I’m aware that this year program is already set, but we better know what to watch for. The coming conference is the first that is planned after Eli has gone from us. How can we as a community keep the momentum?

Response from David Poveda:  Hi Eli, I might recall to you that I have been a TOC consultant for 15 years now. The real value that I got from previous TOCICO conferences was the knowledge delivered by Eli Goldratt. To be honest, the rest was almost anecdotic and social with some important exceptions such as your speech on S-DBR in Miami.

Given that Dr. Goldratt left us, I have not signed in for this year because of the uncertainty that I have regarding the cost/benefit
of attending it. Cost not only in money but also in time (maybe more important at this moment). Would it be worthy to spend the money and one week? Will I get really substantial new knowledge??!!!

I have not made up my mind yet. Please convince me!!!!  Thanks in advance. Good to be in touch with you.

Response byEli Schragenheim:  Thanks David for putting this question on the table. I assume many experienced TOC consultants and practitioners are asking the same question: would we hear any new breakthrough-insights in the coming TOCICO
conference?

I believe that this is exactly what is going to happen. In a minute I’ll describe what we, the board of TOCICO, planned for the
Chicago specifically to answer the question. First I like to draw attention to the fact, that you know well, that Eli Goldratt had a passion to push intelligent people to achieve their personal goal and add value to the world.  This created the chance for quite wide and varied group of people to become the personal pupils of Eli. These people do not have Eli’s unique genius, but they went through quite a hard way to sharpen their thinking and be able to present solutions to unsolved problems – thus creating something new and exciting, even if it is in a narrower area than Eli would have treated it. Arguing face-to-face with Eli meant going into a storm. Coming alive and well out of the storm probably means we (I’m including myself in this group of Eli’s
personal pupils) we did acquire a certain capability to think afresh and come up with new insights.

In his last two weeks of his life Eli made a special emphasis on “Never Say I know”. He aimed it at us to urge us to check
again our basic assumptions, including the assumption that we can learn only from Eli Goldratt.

The first two days of the Chicago conference are going to challenge the current knowledge AND direct us to look for better solutions.  Day 1 is focused on the five main knowledge areas: S&T, Production/Operations, Distribution/Retail, CCPM and the TP. Each session will be facilitated – it is not going to be just a presentation by the “one who truly knows”. By the way, the one area I think Eli did not excel was to facilitate – he did not have the patience. The facilitators we chose are much more relaxed and willing to listen. The most important factor to me is to layout the BOUNDARIES of each area: what are the necessary conditions that define the area for which methodology is effective. Then we would start to analyze what to do when one or more of the necessary conditions (usually stated as assumptions) do not apply.

The second day consists of nine presentations for the Goldratt Foundations – meaning a committee has found out that each one of them has UNIQUE new ideas/solutions/set of insights to offer.

So, we replace the two-days of Goldratt by one-day facilitated discussions on the existing knowledge what how can we expand it, and next day using the classic way of presenting new knowledge. I believe these two days are NOT going to be anecdotic.

The two remaining days are going to be somewhat different as well. One important change: most presentations would take only 30
minutes including Q&A. Then we plan a “Hype-Park Corner” for even shorter presentations and discussions. This way we try to capitalize on the important feature of having many but variable level of presentations: giving room for new people, new ideas and more choice for the attendee, hoping that some of them would be truly good.

Suppose that out of ten presentation you listen in the last two days seven or eight did not add anything worthwhile. Is it bad? Is it truly waste of time? What about the two or three that did offer something new?  What is the value of that?

David, what is your alternative? You can definitely go on your own in developing yourself and the service you provide to your
customers. If we all do that TOC would die and all what will remain is a bunch of pretty clever people helping some organizations and when they die nothing will be left. Without sharing this is what would definitely happen. If we learn to consult each other, something that I do quite extensively, we improve ourselves and we improve the reputation and the practical impact of what we
have all learned from Eli Goldratt.

Response by David Poveda:  Hi Eli: Thanks a LOT for you reply. Now I know it is important to attend the conference and I will do so. Quite some good reasons you have shared with all of us. Look forward to see you there.

In the other hand, I must comment on the fact that your reply and arguments were totally new to me. Why GM and TOCICO did not tell us that from the beginning? I have received many mails from GM inviting to the conference but they did not made clear what you just did.

I suggest you share your reply with as many people as possible in the TOC community. With your permission, I will share it with the TOC group we have in South America.

Thanks again!!

Click here for more information and to register for the 2012 Theory of Constraints TOCICO Conference.

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The deadline for the early bird rate is April 15.  And there are limited on-site rooms, so the earlier you register the better.

The conference is June 3rd to 6th in Chicago, IL at the Q Center.

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