Business Process Ugly – The Red Folder Story

Red Folder DiaryA manufacturing equipment reseller takes in used equipment on a daily basis to be refurbished, repaired, and updated so it can be re-sold. It’s the core business – how they make money.

Here’s how the business process was set up:

  • Each piece of equipment went through an initial assessment which generated a variety of printed materials.
  • The printed materials were put in a red folder which was then attached to the piece.
  • Each team member on the manufacturing floor would consult the red folder to see if he or she needed to do any work on that piece of equipment.
  • If he did, but another person needed to do work first, he would go to the next job and depend on being told when the piece would be ready for his work.
  • The salespeople did not know what types and specs of equipment would be available for sale – nor when a piece would be ready to ship out.
  • Management did not know where bottlenecks existed, how to correct them, and did not even know what sorts of specialists might need to be hired.

I don’t have to tell you that the turnaround time – from intake to resale – could be a month or longer.

As it happens, this story has a happy ending. (We worked with this customer to automate the business process and turnaround time got reduced from 28+ days to 7 days, cash flow improved, and the business is more secure than it has ever been.)

But not all stories like this are happily resolved.

Getting into the business processes – fully understanding what they are – is key to understanding barriers that could exist in your business. Only then can you overcome them.

 

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