Reduce stress and increase administrative effectiveness
Increasingly complex, administrative requirements, closing & reporting, new accounting principles, internationalisation, the need to provide accurate cash flow forecasts, risk management: administrative, finance and control roles are increasingly complex and evolving.
If on top of all this we add the trend towards more multitasking and the need to devote more time to business development together with the CEO, we can only conclude that the professional life of a CFO must be particularly chaotic. Under such conditions, how can we ensure that their activities receive the required safeguarding? How can you reduce stress and increase your effectiveness?
The real problem is not the increased complexity of the role, but a less than optimal management process which, unless critically reviewed, does not take the opportunity to reduce times and eliminate certain activities.
In this context, applying Lean principles allows you to standardise processes, drastically reduce lead times and trigger a culture of continuous change, driven by the active contribution of the entire administrative staff.
Founded in 1939 with headquarters in Turin, Ecopak is a company specialising in the production of bakeware and specific packaging intended for the global confectionery industry. Specifically, the company produces wrappers for highly-automated lines and baking moulds for industrial lines such as panettone and colombas (Italian Christmas and Easter cakes). Today Ecopack has a vast clientèle distributed all over the world. The group has 250 employees and 6 production plants located in Italy, Canada, India, Tunisia, Russia and Brazil. Consolidated turnover totals 25 million euros, and is showing consistent growth. The company applies Lean logic to Operations, HR and strategic management.
Due to a lack of effectively managing its activities, the administration, finance and control department was not performing to the best in its internal activities and was having difficulty in controlling the results of other companies within the group.
For this reason, the owners have undertaken a Lean improvement and tutoring project in recent years aimed at streamlining processes and orienting the specific sector to continuous improvement.
The company decided to start the project for the following reasons:
- Complex accounting transactions and undefined working practices causing a high percentage of errors
- Non-optimal process management throughout the organisation
- Long lead times in the operating and downtime cycle with various unnecessary activities
- Stressed staff
The project included a Lean review of the following administrative processes:
- Sales and purchases of raw materials
- Assets and depreciation
- Personnel administration
- Financial closing
After concretely defining the objectives and scope of the project, a database of all administrative activities, including those made at other offices, was created with the timing, frequency and mode of operation. In total 7 process, 47 sub-processes and 195 activities were anaalysed. This database was used to identify where the biggest areas of improvement were hidden, and then verify at the project’s conclusion what benefits were obtained.
The starting point of the project was the detailed mapping of processes, in their current state (“AS IS”) and in their desired future state (“TO BE”). All the people involved quickly saw the benefits of the project and felt that they were helped in a practical way. Testing and problem-solving activities were also carried out on the future status, in order to confirm or modify the assumptions taken into account during the mapping phase.
Prior to implementing the designing of the processes, the OPL (One Point Lessons) were drafted and shared. It is important to note that from a Lean Thinking perspective standardisation is a dynamic, non-static activity, unlike how it is seen in many companies.
Activating continuous improvement
The desire to focus on people’s growth was important for the success of the project so that in the future the groundwork has been laid that will allow us to take and manage all the opportunities to further improve processes.
Only the introduction of continuous improvement, as an integral part of the entire process can ensure that these opportunities are accomplished in an organised and systematic way.
For this purpose, Ecopack introduced the following organisational changes:
• Allocation of the daily workload to “slots”.
• Visual work planning for individual employees.
• Daily activity reporting, with particular attention to continuous improvement and management control activities.
• Visual management of problems and improvements with 4 states (collection, processing, planning, execution).
• Introduction of the A3 problem-solving method.
- The project repayed its investment in a very short period of time. At the cost of 20 days invested in consultation, the company, in just the first year, reaped €100k of benefits from the project.
- 30% time saving: Organic reduction of staff and overtime, creation of value-added activities (training, improvement projects, management control).
- 50% reduction in lead times for invoicing, recording invoices and month-end close.
- Clarity on roles and responsibilities.
- Simplification and elimination of unnecessary activities.
- Defining a standard operating procedure for all activities (increased quality and flexibility).
- Improvement of the information and document flow between the various offices.
- Preventive, rather than curative, measures.
- Continuous improvement process, led by operators as “process owners”.
- Effective control of administrative activities.