The objective of Salient’s Alignment Consulting service is to make the intelligence provided by the software as beneficial as possible to users throughout the organization by careful matching of business measures at each level to the overall strategy objectives of top management.
The elements of the alignment exercise are:
- Discussion and determination of business mission, strategy and objectives
- Measures of individual contribution to business objectives for each peer role within the organization, from the lowest managerial level to the highest
- Description and terms of measure for each business lever that is available and controllable by each role player (such as buying authority, pricing, service levels, customer support investments, etc.) Identification of business conditions and / or capacity constraints (time, space, distance, budget, census, etc.) which will be used to calculate individual and process productivity.
The alignment exercise will yield these outcomes:
- The key value productivity metric by management role, together with a comprehensive list of “controllable levers”, causal conditions and capacity constraints, for example:
- A sales manager’s key metric may be to “increase overall customer value”, i.e., profitability and growth (profit potential). Her controllable levers may be: customer service and inventory levels, pricing, promotion frequency and duration, product mix, new or expanded product placements and new or captured customer accounts. She will use the software to compare cycle to cycle changes in results, in this case, customer value added as they are affected by one or more of her business levers.
- A warehouse manager may be charged to balance demand against capital risk and operating costs, in other words, “keep inventory and operating costs as low as possible without impact to workplace safety, while keeping adequate stock to meet demand“. His controllable levers are staffing, organizing staff responsibilities, safety training, vendor relationships and stock levels. One possible value productivity metric: net inventory management cost per SKU (inclusive of capital opportunity training and insurance costs).
- A solution design map of the data (by type and source) required to derive the metrics, levers, conditions and constraints identified in part I of the exercise (above). This document will be used to build a system that reflects the mutual performance objectives of owners, executives and operators.
- A “gap map” listing of data that are desirable or necessary for the solution but are not available from the client’s sources. This document will be a client resource for determining next steps in data automation and storage.
- A training curriculum design document providing an overview of the particular role based training and system use aids such as bookmarks, storyboards and dashboards.
- A glossary of terms to foster broad understanding of calculation and attribute descriptors.
- A project plan documenting the timeline, responsibilities and critical path to successful implementation.
“All Revenue” and “All Costs” must be filtered through “constraints” to arrive at “True Value Added.”
Another way to think about this:
P&L = All Revenue – All Costs.
True Value Added = All Revenues – All Costs per unit of constraint (per sq. foot; per hour; per capita, per budget dollar, etc.).
We show decision-makers precisely how they created true value added so that they can improve performance continuously.
All business processes share one or more of these elements:
conditions and constraints
units of anything
Space, Distance, Population, Capacity, Weather, Payroll
cost, price revenue, margin
Headcounts, Inventories, Budgets