LEAN BUSINESS 2100 MANAGEMENT PROGRAM

Tutorial 1

GENERAL MANAGEMENT

Check Point 3

THE LEAN BUSINESS ENGINEERING METHOD

www.LeanBususinessClub.com

© Lean Business Club, Inc. 2016

THE LEAN BUSINESS ENGINEERING METHOD

What Will You Learn In Check Point 3?

1. Statistics about small business in the U.S.2. What are the main reasons for small business failure?3. What is the biggest problem about small business?4. What is the key to your success in business?5. Two components of the lean business engineering method6. The prime purpose of the lean business engineering method7. What is the lean business engineering house?8. The benefits of the lean business engineering method9. What is the lean business engineering process?10. The first stage in the lean business engineering process11. The Lean Business 2100 knowledge-based foundation.12. The second stage in the lean business engineering process13. Part 1.1: Lean Operational Management Analysis14. Part 1.2: Financial Performance Analysis15. Part 2.1: Lean Operational Management Plan

THE LEAN BUSINESS ENGINEERING METHOD

What Will You Learn In Check Point 3?

16. Part 2.2: Financial Performance Plan17 Part 3: Lean Business Solutions18. The Lean Business Engineering Method Contribution19. For Serious Business Owners Only20. The Latest Information Online

Do You Need To Know Check Point 3?

Level Your Management Level Yes Optional

1 I Am An MBA Student. V

2 I Am A Professional Manager In A Company. V

3 I Plan To Start A One-Person Business. V

4 We Plan To Start A Small Business Without Employees.

V

5 I/We Plan To Start A Small Business With Employees.

V

6 I Am A One-Person Business Owner. V

7 I Am A Small Business Owner With Employees. V

8 We Are Small Business Owners Without Employees.

V

9 We Are Small Business Owners With Employees.

V

10 I Am A Management Consultant Or A CPA. V

Statistics About Small Business In The U.S.

According to the U.S. Small Business Administration (SBA), there are about 27.9 million businesses in the United States and they include:

• About 21.7 small businesses without employees or micro businesses.• About 6.2 million small to medium-sized businesses with one to 500

paid employees.• About 20,000 large businesses with over 500 paid employees.

The U.S. Bureau Of Labor Statistics provides the following details related to small business activities during 1994 – 2010 period:

• About 500,000 to 650,000 new business startups per year.• About 2.5 million to 4.7 million new jobs per year created by new

business startups.• About 70% of all small business startups fail after 12 years in

business.

According to the American Bankruptcy Institute:• About 43,000 businesses per year filed for bankruptcy during a 1994

- 2012 period.

What Are The Main Reasons For Small Business Failure?

The main reasons for small business failure usually include:

• Lack of business knowledge and management experience by business owners.

• Loss of customers due to poor value of products and services offered by the organization.

• Insufficient working capital employed by the organization.• Poor organizational culture adopted by business owners.• Unprofessional management practices employed by business owners.

• Absence of a cohesive management structure within the organization.

• Excessive waste of human, material, and financial resources within the organization.

• Poor communication between business owners and employees within the organization.

• Low level of morale and motivation by employees within the organization.

• Low level of employee productivity within the organization.• Health problems experienced by business owners.• Bad economy.

What Is The Biggest Problem About Small Business?

The biggest problem about small business is this:

The majority of people in business don't have business management education, while the majority of people with business management education are not in business!

What Is The Most Important Question That You Need To Ask?

The most important question that you need to ask yourself to succeed in business is:

Do I really know enough about business management to succeed in business in the long-term?

What Do You Need To Remember To Succeed in Business?

You must remember these three critical facts to succeed in business:

• The more you will learn today, the more you will realize how much you did not know yesterday.

• Your business management knowledge will become the cornerstone of your success in business.

• Time will never come back, money you can make and lose, but knowledge will stay with you forever!

What Is The Key To Your Success In Business?

The key to your success in business includes the following:

• Your sense of decency and positive attitude.• Your business knowledge and experience.• Your entrepreneurial skills.• Your professional knowledge and skills.• Your ability to finance your business.• Your flexibility in dealing with people.

• Your focus and positive energy.• Your ability to “wear several hats” at the same time.

Are You Ready To Engineer Your Business For Success?

If you are ready to engineer your business for success then you should be prepared to become a “Business Engineer”.

If you want to become a business engineer, you will need to learn about the Lean Business Engineering Method.

Two Components Of The Lean Business Engineering Method

The Business Engineering Method

Lean Management

The business engineering method provides cross-functional management guidelines designed to enable business people to maximize business performance and profitability through Western-style business management values, methods, and principles.

Lean management provides practical guidelines designed to enable business people to maximize the value of products and services offered to customers and to improve business performance through Japanese -style business management values, methods, and principles.

The Lean Business Engineering Method

Lean Business Engineering is a cross-functional method of applying traditional Western-style management guidelines and lean management guidelines to operational activities within any organization to maximize the product and service value, operational performance, and profitability. This method is at the core of the Lean Business 2100 Management Program.

The Prime Purpose Of The Lean Business Engineering Method

The Lean Business Engineering Method is designed for business people, professional managers, consultants, CPAs and students:

• To evaluate their potential for business success.• To evaluate their personal level of business management knowledge.

• To complete their cross-functional management training.• To evaluate their company's operational performance.• To develop a comprehensive plan of action.• To implement cost-effective management solutions in all major

operational areas of business activities.

The Lean Business Engineering Method Represents A Universal Management Tool

• A Learning Tool for MBA students.• A Management Tool for professional managers.• A Be-Your-Own-Management-Consultant Tool for small and

medium-sized business owners.• A Professional Management Tool for management consultants

and pro-active CPAs or management accountants.

What Is The Lean Business Engineering House?

The Lean Business Engineering House provides a descriptive representation and outlines the most important elements of the Lean Business Engineering Method.

The Benefits Of The Lean Business Engineering Method

• Improved personal business knowledge.• Improved cross-functional business analysis, planning and solutions.• Improved level of customer loyalty and increased level of repeat

business.• Improved level of employee morale and motivation.• Streamlined operational activities.• Improved quality of your products and services.• Improved value and reduced amount of waste.• Reduced operational costs.• Reduced inventory requirements and associated costs.• Improved productivity and reduced turnover of employees.• Improved communication.• Increased productivity and profitability.

What Is The Lean Business Engineering Process?

The Lean Business Engineering Process is the process of implementing the lean business engineering method and it can be accomplished in two stages.

Two Stages In The Lean Business Engineering Process

Stage 1: Accomplish your personal objectives in business.

Stage 2: Accomplish your business objectives (for business owners only).

The First Stage In The Lean Business Engineering Process

1. Evaluate your personal potential for business success.

2. Evaluate your personal business management knowledge.

3. Develop a plan of action to improve your personal business management knowledge.

4. Improve your personal business management knowledge on a continuous basis.

The Lean Business 2100 Management Program Provides The Knowledge-Based Foundation

The Lean Business 2100 Management Program provides the knowledge-based foundation for the lean business engineering method.

This program contains Five Tutorials and 20 Check Points per Tutorial covering five major operational management areas.

Five Tutorials Contain 100 Check Points

TUTORIAL 1General

Management

TUTORIAL 2Human

ResourcesManagement

TUTORIAL 3Financial

Management

TUTORIAL 4 Operations

Management

TUTORIAL 5MarketingAnd Sales

Management

20Check Points

(1-20)

20Check Points

(21-40)

20 Check Points

(41-60)

20 Check Points

(61-80)

20 Check Points

(81-100)

The Second Stage In The Lean Business Engineering Process

Part 1: Lean Business Analysis

1.1 Lean Operational Management Analysis

1.2 Financial Performance Analysis

Part 2: Lean Business Plan

2.1 Lean Operational Management Plan

2.2 Financial Performance Plan

Part 3: Lean Business Solutions

3.1 Lean General

ManagementSolutions

3.2 Lean Human 

Resources Management

Solutions

3.3 Lean Financial

ManagementSolutions

3.4 Lean Operations

ManagementSolutions

3.5 Lean MarketingAnd Sales

ManagementSolution

Repeat The Above Process On An Annual Basis.

Part 1.1: Lean Operational Management Analysis

Lean Operational Management Analysis is designed to enable you to complete a detailed evaluation of your company's current activities in all operational areas and identifying strengths and weaknesses in each area.

Key Questions Of Lean Operational Management Analysis

• How strong is our company's performance in various areas of operational activities using traditional Western-style management guidelines as performance evaluation benchmark?

• How strong is our company's performance in various areas of operational activities using lean management guidelines as performance evaluation benchmark?

Five Elements Of Lean Operational Management Analysis

Lean General

ManagementAnalysis

Lean Human

ResourcesManagement

Analysis

Lean Financial

ManagementAnalysis

Lean Operations

ManagementAnalysis

Lean MarketingAnd Sales

ManagementAnalysis

Part 1.2: Financial Performance AnalysisFinancial Performance Analysis is designed to enable you to complete a detailed financial performance evaluation of your company activities.

Key Questions Of Financial Performance Analysis

• How is our company doing in terms of its financial performance and results at present?

• What were our company’s financial results during the last three years?

• What are the financial performance trends developed by our company in the last three years?

Three Elements Of Financial Performance Analysis

Current Comparative Financial

Financial Analysis

Financial Analysis

Ratio Analysis (Optional)

• Current balance sheet• Current income statement• Current statement of cash flows

• Comparative balance sheet• Comparative income statement• Comparative statement of cash flows

Evaluation of financial ratios related to:• Solvency• Profitability• Liquidity• Ability to manage assets

Part 2.1: Lean Operational Management Plan

Lean Operational Management Plan entails developing a detailed plan of action related to your company’s operational activities and assigning the responsibility to each member of the management team.

Key Questions Related To Lean Operational Management Plan

• What operational tasks do we need to accomplish for maximizing our company's performance in accordance with traditional Western-style management guidelines and lean management guidelines?

• Who should be responsible for implementing each operational task?

• When should each operational task be completed?

Five Elements Of Lean Operational Management Plan

Lean General

Lean Human

Lean Financial

Lean Operations

Lean Marketing

Management Plan

Resources Management

Plan

ManagementPlan

Management Plan

And Sales Management

PlanPlan A For

Check Points 1-20

Plan A For Check Points

21-40

Plan A For Check Points

41-60

Plan A ForCheck Points

61-80

Plan A ForCheck Points

81-100

Part 2.2: Financial Performance Plan

Financial Performance Planning entails developing a comprehensive financial plan of your company activities for the current and next fiscal year periods*.

The financial performance plan, or a Master Budget includes:

• Operating Budget, • Capital Expenditure Budget • Cash Budget.

The financial performance plan must also take into account various tax strategies to ensure effective utilization of your company's financial resources.

Four Elements Of The Financial Performance Plan

Operating Budget

CapitalExpenditure

Cash Budget

Tax Strategies

Budget

Part 2.2: Financial Performance Plan

The main purpose of implementing Lean Business Solutions in all areas of your company’s operational activities is:

• To maximize the value of your company’s products and services offered to customers.

• To streamline all operational activities.• To minimize waste.• To improve overall performance efficiency.• To reduce operational costs on a continuous basis.

Apply Lean Management GuidelinesTo All Operational Activities Within Your Company

ImplementLean

In GeneralManagement

Activities

ImplementLean

In HumanResources

ManagementActivities

ImplementLean

In FinancialManagement

Activities

ImplementLean

In OperationsManagement

Activities

ImplementLean

In MarketingAnd Sales

ManagementActivities

The Lean Business Engineering MethodContribution To General Management

• Meaningful direction in developing strategic plans.• Effective implementation of strategic plans.• Comprehensive management by objectives (MBO) process.• Improved method in developing operational plans.• Effective implementation of operational plans.• Comprehensive plan of management.• Sound organizing process.• Effective organizational structure.• Improved communication process.• Strong management control.

The Lean Business Engineering MethodContribution To Human Resources Management

• A better way of treating employees.• Effective job analysis.• Concise job descriptions and job specifications.• Cost-effective employee training and development.• Improved employee motivation.• Effective employee performance appraisal.• Sound employee career management.

• Improved labor-management relationship.• Improved employee safety and health.• Effective conflict management and resolution.

The Lean Business Engineering MethodContribution To Financial Management

• Improved financial management process.• Accurate financial information.• Effective bookkeeping process.• Accurate financial statements.• Effective financial performance evaluation.• Improved budgeting process.• Effective internal control and cash management.• Improved control of purchases and disbursements.• Improved inventory management.• Accurate cost accounting.

The Lean Business Engineering MethodContribution To Operations Management

• Improved facility design, location, and organization.• Effective product, service, and process design and standardization.

• Effective equipment evaluation and selection.• Improved plant layout.• Cost-effective equipment maintenance and replacement.• Improved operations planning.• Improved material requirements planning.• Effective operations control.• Improved supply chain and material management.• Improved total quality management.

The Lean Business Engineering MethodContribution To Marketing And Sales Management

• Comprehensive target marketing.• Effective marketing strategies.• Effective product and pricing strategies.• Effective promotional and distribution strategies.• Improved direct marketing.• Sound marketing and sales planning and budgeting process.• Improved sales force recruitment, selection, and training.• Effective sales organization.• Improved sales force management and motivation.• Effective sales performance evaluation and control.

The Lean Business Engineering MethodContribution To Your Organization

• Improved business knowledge by your management team.• Detailed business analysis of your company’s performance.• Comprehensive business plan for your company’s operations.• Cost-effective lean business solutions for your company.• Improved value of products and services offered by your company.• Improved customer satisfaction with your products and services.• Improved long-term customer loyalty toward your company.• Improved operational value stream within your company.• Reduced and waste within your company.• Improved process of selecting the most qualified employees.• Improved level of management control within your company.• Improved communication, morale, and employee motivation.• Improved efficiency and productivity within your company.• Improved profitability of your company and higher ROI.

For Serious Business Owners Only

Reprinted with permission.

Additional Information Online

For additional information about

the Lean Business 2100 Management Program online

please visit

www.LeanBusinessClub.com

© Lean Business Club, Inc. 2016