Omega Results Ltd introduces the Umtplus® software for handheld computers.
Optimise the auditing, assessment and compliance process by leveraging handheld computing technology.
UmtAudit™ facilitates paper-free inspections, assessments & audits, gives instant comprehensive reports AND eliminates post-audit work.
Discover the audit and inspection capabilities of UmtAudit™ for the Construction Industry.
UmtAudit™ can provide paperless and real-time inspections and audits for Councils.
To learn more about the audit and inspection capabilities, enhancements and other benefits, including how UmtAudit™ reduces costs whilst improving both efficiency and compliance:
As Kaisen was used and developed in Toyota. Six Sigma was developed by Motorola.
Six Sigma is quality management based using statistical methods and creates a special infrastructure of people within the organisation, “Black Belts”, who are experts in this methodology.
Each Six Sigma project follows a defined series of steps each with quantified financial targets (cost reduction/profit increase).
In Six Sigma a defect is defined as anything that would lead to customer dissatisfaction.
Six Sigma is based on quality improvement methodologies – quality control, TQM (total quality management) and zero defects.
The elements of Six Sigma are:
1. Continuous efforts to achieve stable and predictable process results ‐ minimise variations.
2. Manufacturing and business processes that have characteristics that can be measured, analysed, improved and controlled.
3. Commitment from the entire organisation, particularly from top – level management.
4. A clear focus on achieving measurable and quantifiable financial returns from any six sigma project.
5. An increased emphasis on strong and passionate management leadership and support.
6. A special infrastructure of “champions” such as “Master Black Belt”.
7. A clear commitment to making decisions on the verifiable results rather than assumptions.
“Six Sigma” comes from a field of statistics called “process capability studies.” It is based on the ability of the manufacturing process to produce a high proportion of output within specification – a target level of 34 defects per 10 million opportunities, Six Sigma’s implicit goal is to reach this level
or better.
Motorola has registered Six Sigma as a service mark and reportedly have saved over £ 17 billion since inception (as at 2006).
More recently Six Sigma has been combined with Lean Manufacturing to yield a methodology called Lean Six Sigma.
Sigma – The Greek letter σ is used to represent standard deviation in statistical analysis. The Six Sigma comes from the idea that if one has six standard deviations between the mean of a process and the nearest specification limit when that will fail to meet the specifications practically no items will fail to meet the specifications.
One of the key innovations of Six Sigma in the professionalization of quality management functions. Six Sigma is now not confined to the shop floor but the responsibility of a management hierarchy using Martial Arts titles to embrace all business functions.
Six Sigma is not a methodology in its own right but a process that embraces established quality management methods in a controlled and systematic environment. As such, software packages have been developed to monitor the systems and procedures in order to produce quantifiable results and reporting.
The concept of Six Sigma is extremely technical and its implementation can only be carried out by experienced quality management professionals.
The measurement of manufacturing and business processes, the analysis of results and the reporting of variances is assisted greatly though the use of PDA’s at the workplace.
Know where you are now and where you will be next year!
From easy set up through intelligent drill-down and reporting, this article includes multiple screen-shots, examples and instructions to introduce this superb business intelligence tool.
Derived from the Japanese word for “improvement” Kaisen is a Japanese philosophy that focuses on continuous improvement in all aspects of life. It is in the context of Kaisen in the workplace where UMTPlus and UmtAudit™ tools are beneficial.
The philosophy can be used to continually improve all functions within the business from manufacturing to management and from the CEO to the shop floor workers. Improvement is achieved through standardisation of procedures and processes, eliminating waste and continually measuring against the standards set.
Kaisen was initially implemented in a number of Japanese businesses shortly after W.W.2., including Toyota. It has gradually spread across the globe and is internationally recognised as a necessary manufacturing control tool.
Kaisen is a daily activity which goes beyond productivity improvement, it humanises the workplace, eliminates excessive hard work (that may lead to stress or illness) and teaches workers confidence in experimenting with their work practices in order to improve productivity and eliminate waste.
To be most effective Kaisen must adhere to these three principles:
1. Consideration of the process, results required and the steps to achieve the results.
2. Systemisation of the whole process (the big picture) in order to avoid creating problems elsewhere in the process.
3. A learning, non – judgemental, non – blaming culture where the original assumptions can be safely re-examined.
All members of the organisation from the CEO down, and even external shareholders, may participate in the process. The way the process operates is largely determined by the organisation, usually taking the form of a group within a particular section that become responsible for their own environment and productivity. Whilst improvements are usually small, a culture of continuous improvement yields significant improvements in all areas over a period of time. So it is not just the results, but the building of the culture, that is at the heart of Kaisen.
The cycle for implementation:
1. Standardise an operation – define in detail
2. Measure cycle times, materials & other resources
3. Gauge measurements against requirements
4. Innovate to improve productivity whilst meeting requirements
5. Standardise the new process
6. Continue ad infinitum
Success of the process lies in the time – based thinking and any ways in which measurement and checking can be made in less time add to the overall improvement generated by Kaisen. Work measurement and time study using PDA’s where instant reporting can also be achieved is a necessity rather than a nicety.
Everywhere you look there are ad’s to beat the recession – usually based on discounts and offers – but still asking you to spend money. The Government itself advises spending to get out of the recession.
It’s never quite that simple – is it?
For businesses to survive they still have to spend – but more wisely – top marketers and entrepreneurs are saying that the money is still there but it’s moved elsewhere – many companies thrive in these times. Companies need to change – to adapt. Planning from a different perspective – dealing with businesses that are profitable – they’re still spending – finding ways to get them to spend more. Consider losing the low profit “pain in the butt” customers.
For the management accountants this is a time to work more closely with the sales and marketing departments to plan on future campaigns – not to cut but to improve. Focus on what works and identify the best customers and markets to go after. Identifying the most profitable products is more crucial – using ABC and traditional costing – unbelievably many companies have reduced their costing to a bare minimum or do not cost at all but rely on market forces. This is inefficient and the more efficient the company the better the chance of survival and growth.
As in previous downturns companies turn to labour cutting and reducing spending on advertising and marketing, pushing harder on debtors and taking longer to pay creditors – not really the best way to run a good business – There is a correlative cost of marketing to sales achieved – if done properly – the more you spend the more business you get. Aim to get a ROI of at least four times your marketing spend in additional gross profit. Now is the time to negotiate better deals as most advertisers are struggling. Get more from your staff – a better quality product may allow you to increase you prices. Few companies invest in new equipment, people or systems – but they should – if it improves their chance of survival.
Every company has weaknesses and can improve their efficiency in a number of areas. It is the opportunity for management accountants and FD’s to be creative and proactive.
The survivors in recessionary times will tell you they’ve got more from their staff and are stronger when the good times return. This is no accident.
Accountants are now under more pressure to produce figures faster – banks and investors are more keen to see how well the business is surviving. To achieve this and allow time for more creative and objective thinking the accountant must step back and look at ways to produce figures faster and identify waste.
Typical problems that should be addressed are:
There are a number of time saving articles which can be accessed free from
www.omegaresults.co.uk/info/articles/ and a free dvd available from
www.omegaresults.co.uk/about/enquiries/free-dvd/
Bob James FCMA
Omega Results Ltd
May 2009
This is a process which in its simplest ideology is designed to eliminate waste. It looks at the whole process as being a means to produce a product to meet the customer’s needs at the lowest possible price with the maximum efficiency.
Lean manufacturing is a generic process management philosophy coming originally from Toyota. It focuses on Toyota; “seven wastes” in order to improve customer value. Collectively known as ‘muda’, these are:
1. Transportation (Moving products & components unnecessarily).
2. Inventory (Not making more than needed).
3. Motion (People not moving around unnecessarily).
4. Waiting (Smooth processes eliminating waiting).
5. Pre processing (Not making before necessary).
6. Over Processing (Not wasting machine time by using lower efficiency machines or processes).
7. Defects (Checking, correcting or producing).
The process of Lean manufacturing is achieved through “Lean thinking”. As waste is eliminated quality is improved and production time and cost is reduced. Techniques such as Value Stream Mapping, Five S and Kanban are “tools” used to access in waste reduction.
A further approach used by Toyota was the improvement of flow or smoothness of operation. An analogy would be of smooth use of the accelerator in a car reduces petrol usage & therefore waste. The smooth flow approach may highlight quality improvements not found through pure waste reduction thinking.
Toyota’s success in “Lean Thinking” is believed to have helped by their mentoring process. As in Kaisen, the whole organisation must play a part.
In all control systems there must be planning, measurement of standards measurement of actual results, comparison and reporting, then ACTION to improve the actuals and then the standards in perpetuation. It is the measurement, recording and reporting at the workplace, where the PDA solutions are very effective.
Omega Results has one major philosophy – to give its clients the opportunity to save time and money.
To this end we have deliberately chosen software to make life easier and more rewarding for the people who use it.
Accounting software from Sage, whilst the most popular in the UK, is not always the most user‐friendly, depending on the company’s needs.
We at Omega have created a large number of additional reports and found workarounds to get the best out of Sage 50, Payroll and Batch Controller.
One difficult area is with Sage 50’s departmental analysis. Unfortunately there is something of a problem where some areas use the Department Number and some use the Department Reference. This caused no end of problems until the problems were all identified. Our client had a number of department codes it has used for years, these were set up in Sage 50 and we expected these to be used consistently.
Here are details of what needs to be used:
1. Importing Transactions – asks for Department Reference – actually needs Department Number.
2. Balance Sheet Accounts – all one department – control accounts pick up entry from input P&L item – may need to be changed for consistency.
3. Bank Revaluation – Drop‐down box shows Department Reference – need to put in Department Code.
4. All control accounts use default of 0 – need to be changed for sales, purchases, discounts, exchange differences etc.
5. None of the standard reports give Department Reference – need to be added from linked table.
6. No departmental TB and dumping all transactions from the ledger into CSV is not reliable.
7. (Spurious duplicates appear that are hard to find) – needs to be exported by ODBC and exclude deleted transactions. These transactions can then be used to create a Trial Balance for all balances by account code plus department.
The other area where we needed to put in extra work was in the payroll to nominal link – it didn’t work because the company wished to split its direct, indirect and salaries into different nominal codes and the payroll doesn’t allow for this.
The company also has bonus schemes and shift allowances and overtime rates for Saturdays, Sundays and nights, too much analysis for Sage Payroll to handle! We modified the reports to suit and created a spreadsheet with 4 linked worksheets to create the journal from CSV dumps of the reports automatically. The journal can also be imported if required, to create the CSV reports and the journal we timed at 4 minutes. Without these Excel models, the time taken and errors caused would be quite significant.
The company also produces for their Management Accounts detailed departmental reports and reports for their bank and investors. Nineteen schedules in all – this package usually took three days to produce from the trial balance – with the power of Excel that is reduced to 10 minutes. Details of how to do this can be found on: Automating The Management Accounts Process.
We’d love to hear about your experiences with Sage 50 and what excites you as well as what annoys you.
If you’ve moved from Sage 50 what was that experience like and what did you move to?
