Archive for Duct Tape Marketing
Elevating and Repairing Marketing Constraints
Posted by: | CommentsA continuation of my blog posts of Using the Theory of Constraints. We are concentrating optimizing the Throughput of your Marketing utilizing the Five Steps of Continuous Improvement: Steps 4 and 5.
Step 4. Elevate the system’s constraint.
You may have found significant improvement in the preceding steps and another constraint may have actually developed at this time. This is the step that we have to add capacity to the constraint. It may be additional events, sales people or increased advertising.
Reviewing your Marketing you may have found significant shortcomings in one of the phases. You may have never instituted a formal referral program, for example. You may not have a presence in Social Media.
Jumping into this step early in the process is very common. The newest and/or the latest technology may seem an easy fix. Looking to vendors for your fix is an easy alternative, but you may not find the core problems associated with the constraint if you did. There is a reason this is the fourth step, and you should make every effort to improve the constraint through the fist three steps before adding equipment, software, increased advertising, etc.
This may also be the area that “Tribal Knowledge” may limit your thinking. We defend what we have always done. Look at new and different ways to accomplish the constraint.
Step 5. If a constraint is broken, go back to Step 1. However, don’t allow inertia to become a constraint.
You will always have a constraint. A fundamental concept of continuous improvement. As you correct one another will develop. As in Lean this is a fundamental concept of TOC.
Mot organizations have an unlimited number of things to improve. However, most of the time only a relative few will make a significant difference in your company’s bottom line. If you are going to improve something , IMPROVE IT.
Why waste everyone’s time? Changing the process without the data is cause for failure. You have heard it time and time again, JUST DO IT! We have been trained that way, action is accomplishment. However, the wrong action may accomplish little or drive you deeper into a hole. Without the data from the previous steps, you will not be able to make as effective and dramatic improvements that you desire. Seek 200% process improvements and cost reductions of half!
One of the sayings I have read about in TOC time and time again. Don’t leave inertia become the constraint. Change should help your performance, not hinder it.
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Using the Theory of Constraints in Marketing
Exploiting and Subordinating your Marketing Constraint
Posted by: | CommentsA continuation of my blog posts of Using the Theory of Constraints with your Marketing. We are concentrating optimizing the Throughput of your marketing utilizing the Five Steps of Continuous Improvement, Steps 2 and 3.
Step 2. Exploit the system’s constraint
This simply means; Getting the most out of the weakest link or phase. This is a great time to use the Lean tool of Kaizen. Getting rid of all waste associated with the systems constraint is the first step I would take. One of the things that TOC and Lean both encourage is to observe the process with people very familiar with it. They may tell you that this always happens or maybe an obvious statements such as we don’t have enough people. Looking at the waste you will readily identify some crucial changes.
Put a cost to the constraint. If this is your weakest link, improvement in this area will maximize the entire process. Understanding the cost of the constraint is imperative in moving forward. Once you have a cost assigned to the constraint, you start looking at improvement slightly differently. Observe how things move through a constraint. Hiring that one extra person, holding additional events, dedicating a phone line or a live operator could make significant differences. Using an tip from Rapid Product Development, you may want to parallel this process. This allows simultaneous actions versus many of the different types of time constraints detailed in or list of definitions.
Step 3. Subordinate everything else to the above decision.
Increase output through the constraint(phase) increase output for the entire system. I sometime use the analogy when a salesman senses an order. He puts everything else on hold and dedicates all his resources to getting that order. It is also very similar to the Lean method of Kanban. Kanban is a method of only releasing parts as needed through the process. A card must be given to the preceding event before that phase can start.
Interesting thought may be as you manage marketing campaigns or events that you only release calls, direct mail based on responses from your prospects. A proactive drip management program may solicit certain key actions before additional material is released automatically.
In manufacturing, I have seen a quality station placed in front of the constraint before allowing parts to move through the process. In marketing, you may add a qualifying step so the constraint or process only receives a more qualified prospect.
The next post will be steps 3 and 4.
Related Blog Posts:
Using the Theory of Constraints in Marketing
Identifying your Marketing Constraint
Identify your Marketing Constraint
Posted by: | CommentsAs I mention in a previous post: Every System, typically has relatively few constraints. However, to operate at maximum efficiency, the limiting constraint must be identified. Five Steps of Continuous Improvement help identify and improve the constraint. How do I correlate a Marketing Funnel with the Theory of Constraints? TOC uses the weakest link, a chain as a visual in working with throughput.
Below, I have outlined my basic understanding of the Theory of Constraints from my readings and experience. If you would like to dive deeper into this subject start with the AGI-Goldratt Institute website and there is whole slew of books, trained consultants(Jonas) available throughout the country. I believe the Theory of Constraints principles are a requisite for continuous improvement.
Before starting with the 5-steps, there are two prerequisites:
1.Identify the Goal of the System /Organization
2.Establish a way to measure the progress
The most common goal is to make money and that should be our overall purpose. It sometimes can be overlooked in increasing sales, client retention and many other factors. Many will argue but increase sales can hide many problems. The companies that fail the quickest in a recession are the ones that were living on growth without really generating income.
There are several ways to measure progress with the most common being Throughput, Operating Expenses and ROI. Going into too much detail about how to use the ratios is beyond the scope of this blog. The important thing to remember is that TOC methodology values Throughput and it as the best means to fuel growth. TOC then looks at Inventory(Prospects) second and operating expenses third. So our concentration will be optimizing the Throughput of the Marketing Funnel utilizing the Five Steps of Continuous Improvement :
Step 1. Identify the system’s constraint.
Step 2. Exploit the system’s constraint.
Step 3. Subordinate everything else to the above decision.
Step 4. Elevate the system’s constraint.
Step 5. If a constraint is broken (that is, relieved or improved), go back to Step 1. However, don’t allow inertia to become a constraint.
Starting at the beginning:
Step 1. Identify the system’s constraint.
The system’s constraint is the phase or part of the phase that resource which limits the output of the entire system. Start following your actions and you may find out that your bottleneck is not just getting more prospects in the door. If you can monitor actual numbers, you may be amazed at what is happening to your prospects(inventory). This is where we need to identify the constraint , where is your constraint?
The easiest way in a manufacturing analysis is to walk around and see where the work is piled up. It is not that much different in a marketing process. Walk around and see if there is a pile of sale presentations waiting to go out. You may find people waiting on financing to be approved. Maybe, inconsistent delivery of Newsletters and so forth.
If you have done a good job of building your marketing hourglass, you may be surprised on how easy it is to find. You may be so lucky to be able to eliminate parts of a step, not the entire step. Start internally, as you gain internal control you will also gain the respect of your customers and vendors. This may help you significantly when you ask them to assist you in late improvement needs.
Our Next blog will continue with step 2 and 3.
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