MF Logistics - How “Sick” is Your Business?

When asked this question in a recent survey, most Directors replied “there are no problems with our operations”. But, how true is this? In my experience it is far from the truth.

As individuals we’ve all gone through periods in our lives when we’ve not felt well in ourselves, - a pain here, lack of energy, headaches and many other ailments. It’s only when minor problems become big problems that we turn to the experts to find out what’s wrong and hopefully be cured. Often we look back and wish that we had “done something” earlier or even taken up the expensive option of a Health Check every couple of years. Recognise this either in your own life or that of people close to you?

Well, I can confirm that your business suffers in exactly the same way. Businesses catch “colds” which often costs hard earned margin but you accept these as a part of your business and move onwards and upwards.

Can you be sure however that these “colds” are not indicative of a more serious illness / problem lurking in the background and gaining strength. If this is the case then when it finally reveals itself it can be too late for a quick fix but requires major surgery to avert failure.

This is a somewhat interesting parallel between human ailments and business problems which is often missed by company directors. If the body deserves a Health Check, then why not the business?

Multinationals are large enough to have internal and independent business auditors who rove through the different areas of the business to identify weaknesses or susceptibility, and report these to the business operating boards. It is a proven fact that when business audits are repeated on a regular cycle major benefits can be achieved.

However this fixed asset is not practical for SME’s I hear you say and I agree. But you still however have responsibilities as directors for the health of your business. If you do not have the skills yourself to do the job then you must find them. One solution is to bring them in on a short term short term flexible basis.

Don’t look at this exercise as a costly audit or another accountancy exercise but as a development that will bring advantages to your business. Your expectations should include:
• Is the way we do things the correct and most cost effective way?
• Are there any inherent problems in the way we do it?
• Is there a better way of doing what we do?
• What are the issues that could cause us problems?

You need to get value for your money so a business Health Check must be more than a diagnostic. You should look to receive the following:
• A detailed report showing the opportunities and threats within each area
• Feed back on potential problems and their cause
• Feed back on how other businesses achieve the same results
• An understanding of best practice
• Is the existing procedure cost effective and viable
• How does our operation compare with other similar businesses?

You should then work with the interim resource to plan for recovery and agree what internal or external resource is to be utilised for the recovery.

If there is no internal resource available then bring in an external resource for a fixed period at an agreed rate. Define the parameters and the output from the external resource. Clearly define the areas to be actioned and be honest in your own evaluation of any issues.

Define the work to be undertaken:
• Areas to be covered
• Timeframe for both the Health Check and presentation of the findings
• Costs in stages, so you can terminate the project at any stage.
• Agree the output and format

Most skills can be found cost effectively through the use of Interim Managers. The additional benefit is that Interim Managers work across industry sectors and can therefore bring new ideas to your business.

Why use Interim Resources?:
• Readily available
• Extensive experience across business sectors
• Detached and neutral overview of company and systems
• Easy to replace if not suitable
• Ultimate flexibility
• No threat to existing management team
• Payment by results
• Not on company payroll

Interim Resource Capabilities:
• Does the interim manager have liability insurance?
• Does the interim resource have a minimum of three years experience as an interim manager?
• Has the interim resource relative experience in your business sector?
• Is he / she based locally?
• Ask for references and take them up.

A word of caution:
Sourcing Interim Resources from larger organisations is not necessarily the most cost effective route. Consider your local independent resource first.

A thought for the future:
Find a local Interim Manager and stick with him / her. They will get to know your business and it will cost you less in the long term.

It costs nothing for the initial discussion with the Interim resource. Give them a call.

About the Author
Mike Forryan has some 30 years experience in business processes and has worked for UK, European and US multinationals in various rolls including business development and troubleshooter.

He now runs his own Supply Chain Resources business which includes interim management, consultancy, recruitment and business health checks.