Troubleshooting is an acquired skill and in my opinion, not for everyone. As I write this I realize I'll have a hard time putting into words what I would look for in someone with good troubleshooting skills. Have to think about that one... Back to the task at hand - business troubleshooting. To solve a problem, my approach is generally a divide and conquer kind of tactic. Look at the 'system', pick something in the middle of the problems and if one half works and the other half doesn't, go the direction of the 'doesn't.' For a machine programming problem (in which I am well versed) the problem generally lies on one side of hardware and software. Start there, follow the doesn't work, cut in half again, and repeat. You’ll get the answer soon.
Troubleshooting a business however, is not as easy as a machine that is not quite right. It is something I've come to learn, appreciate and truly enjoy. Most times I've taken on the task, it starts with the business leader/owner perceiving there is a problem. Like most machine programming situations, they can't put their finger on it but it just doesn't smell right to them and have brought me in to do the heavy lifting. A business is fairly simple (in the most generic sense) - you have sales (revenue) and costs. I ask a few questions to determine if the business has a sales problem or a cost problem. There is no multimeter or instrument you can put on that conversation to pin it down, but it's usually pretty easy to find. Order backlog? Sales problem (throughput). Inventory issues (too high) - sales problem (inefficient). Low profitability with high sales and low backlog - cost problem. There are many more scenarios and my diagnosis above are general, but choosing the 'doesn't work' direction for the business is fairly evident. The what to do about it beyond that is the heavy lifting that I tend to like.
Sales problems can manifest themselves in an inefficient sales force (low hit-rate, high-hit/low-pitch rate), or more often I see a throughput problem. Applying the theory of constraints generally helps this one in most businesses, but the top-line answer here - if you have an order backlog that exceeds market (customer) expectations, you are losing sales to the competition. This fact is more important today than ever with a generation of consumers and customers that are used to instant gratification via online shopping and the like. “You want me to wait 9 months for my order…?!?!? Nevermind, I’ll go down the road.” They’ll do that and pay more for an inferior product that you have done a good job of convincing them is inferior and costly (hence your backlog) but they can have it today. Nice work…
Fixing sales problems - there are many routes. The example I’ll use - you have that 9 month order backlog and can’t (or so you are told by operations) speed up production without increasing cost dramatically, or having some other compromise that makes doing something about it not worthwhile. From the team’s narrow perspective they are not wrong. If you do things the way you do them today, you will increase costs and likely erode profits - see cost problems - so why bother, right? This backlog has just highlighted you have a business constraint that can be overcome if done properly. Does it take too long in engineering to release a package for production? We can fix that. Do you have excessive lead times on critical components that define your critical path? No sweat. I’ve heard them all (or at least the most common ones) and I’m still waiting for the challenge that stumps me in this scenario. Most of these are process problems where the staff doing the task day in and day out can’t see a different way. But in my experience has shown, with some creativity and process redesign, we can get there from here.
Cost problems are generally easy to identify, but really hard to fix. I like to start looking at the top ten costs (labour, materials, marketing, contracts, whatever) and benchmark those numbers against competitors, industry and just a general ‘good sense’ tummy rub. Usually, 1-3 (or more) of those cost numbers come up higher than you’d like. Now the heavy lifting… We find a materials cost too high. That usually requires some engineering or design effort to eradicate - now it’s time to assess that ROI. It may just require some supply chain negotiation if the material is a commodity, but usually it is a specialized/custom part of the system or product that is too costly relative to what we think, or what the benchmarking tells us. Labour problems are also a challenge, but by applying the divide and conquer tactic in this area, you can identify a specific labour-heavy area to target for improvement, find a win or two, see if you get the returns you were hoping and then decide if that can be carried on beyond the low hanging fruit.
Even if your business is humming along like a well-oiled machine, I’ve yet to find a situation where there wasn’t opportunity for improvement that performing some business troubleshooting wouldn’t produce a return on. You can be sure of one thing - you’ll learn more about your business in the act and likely be surprised by the outcomes.
Rocky Blondin is a Professional Industrial Technologist by trade. His skills are wide-ranging, acquired over a career in a variety of industries. From washing dishes and coaching amateur athletes to the President of New Product Development, he has gathered a host of stories in his travels and share them here - hoping you find some common ground and shared experience in problems worth solving.