Category Archives: Outsourcing

Important Yield Initiatives for 2017

In the world of food processing and packing, we spend a great deal of effort focusing on production efficiencies and lowering labor cost per unit to improve profitability. However, fresh food processing presents a number of challenges that requires additional focus on improved product yield.

The challenges of fresh food processing are obvious. Our products fluctuate in availability and demand based on seasonal harvest.  And most impactful is the fact that our product has limited shelf life. These obvious traits of the industry simply means we have less room for error as it pertains to processing and getting our end product to market. Not so obvious is the long-term, micro-level planning that needs to take place in order to eliminate waste; thereby increasing our yields and profits.

Of course eliminating product waste requires focus on improved cutting techniques, grading diligence and understanding the client’s needs. But to truly impact improved product yields, operation managers must develop a yield culture over a period of time and apply this top-of-mind awareness to all areas, including pre and post-production. Yield initiatives should also focus on:

  1. Education: It is imperative that from the beginning to the end of the process that everyone is educated on how they impact yields. This includes sales people and account managers.
  2. Supply Chain Shelf Life: Inserting processes throughout the entire supply chain is critical. Controlling temperature, storage and handling pre-processing is imperative.
  3. Procurement: Understanding the procurement process in necessary for quality control. The inventory management of suppliers, prevailing market conditions, and commodity volume requirements affect your ability to increase product yield.
  4. Inventory: Flawless inventory management at your facility is critical.
  5. Transportation: We must be fluent in securing the load.
  6. Facility Shelf Life: Maximizing shelf life through proper temperature, wrapping and ventilation is key to increased yield.

Lastly, the following consumer demands, market conditions and regulations have also created challenges as it relates to increasing product yield:

  1. Increased demand for organic and allergen free produce
  2. Increased focus on serving size based consumer demand
  3. More stringent brix requirements

These fluctuating factors must also be considered throughout the entire process in order to focus on improved product yield.

To learn how we improved yield, reduced unit labor cost and improved pounds p/man hour for a global processor of fresh cut produce in multiple North American plants, visit: Fresh Food Success

nGROUP performance partners are specialists in labor intensive process management for fresh food processors and packers. To learn more please visit www.nGROUP.biz.

New Year, New Energy: Positive Change Requires Positive Energy

New Year, New Energy: Positive Change Requires Positive Energy
Are you heading into 2017 with new challenges and aggressive corporate objectives? If so, you have probably completed detailed research, developed strategies, and lead countless meetings in preparation to facilitate change in your labor-intensive operations. But have you given thought to how you are going to create the energy necessary for change to truly take place – not just on paper – but in the minds and habits of your workforce? In other words, positive and lasting change requires positive and lasting energy to be accepted and adopted at an individual level.
In order to gain the best performance possible from your labor force you must align their motivation with your objectives.   This means that workers must be clear about the company’s objective – crystal clear – and that those goals are part of your production benchmarks that are monitored and shared with the workers DAILY!
Whether you share production reports daily in a meeting or create a powerful display on your production floor, the communication and the vibe you put forward must be individualized to the worker – crediting them as individuals or praising the performance of their shift over another. There is one clear way to know if you are motivating your workforce. If you were the proverbial fly on the wall in the break room, would you hear your workers discussing their performance?
When we first partner at a new facility, we often see the remains of production performance charts that are intended to motivate the floor workers. Too often managers capture data sporadically and worse they don’t share the data with the workers on a consistent basis. News flash – only the workers can affect the outcome of your goals. It is the “duty” of the manager or supervisor to create the energy that motivates the worker. This requires constant monitoring of performance, necessary adjustments that are preventing success, and above all – holding the workforce accountable in a positive, productive manner.
The last consideration for creating a high energy workforce that exceeds your expectations, is to reward your workforce with both praise and pay using a cost per unit model.   In facilities where the nGROUP performance system is utilized, ‘Pay for Excellence’ reinforces that each teammate is an essential part of the team, and is rewarded with incentive pay for their excellent performance. Above all our approach is to create positive, encouraging goal-oriented environments and coach teammates how to work smarter to achieve greater success for themselves and your company.
nGROUP Executives will be attending the RILA conference February 12-15. If you would like to schedule an appointment to discuss 2017’s trend setting labor production methods during the conference, please contact Vice President Ryan Cates at rcates@ngroup.biz. Don’t want to wait until February? Give us a call for a brief phone conversation prior to the conference. See you in Orlando.  
About nGROUP
As an on-site insourcing partner,
nGROUP works with companies in a vested partnership relationship. For over 10 years, the nGROUP Performance System has been adopted by executives and managers in labor intensive industries to meet and exceed corporate objectives. NPS consistently outperforms other methods, increasing productivity, quality, and morale, and reducing labor costs by a minimum of 10-25%.

Logistic Companies Adopt Web Based Business Models

One of the benefits of attending this year’s Council of Supply Chain Management Professional’s Conference (CSCMP) was learning about trends that are on the horizon in the world of logistics. One such change is how technology is enabling companies to connect based on need and availability.

On a basic level, business models such as Uber and Airbnb put consumers in touch with service providers that have openings. For Uber, consumers are connected to drivers with the touch of a button. Only the drivers that are nearby and have available time respond to the consumer’s request. Conversely, Airbnb connects travelers to accommodations that are relevant to their desired location and can quickly see if the timeframe is available.

In the same respect, warehousing and distribution centers have situational or seasonal demands such as trucking and varying needs of warehouse space. Emerging to fulfill these needs are companies that make transportation and warehouse space available on an as need basis; and like Uber and Airbnb, technology facilitates the availability and scheduling.

One such logistics provider is “Quick Transport Solutions.” As described on their website, “We are your one-stop-shop for everything you need to run your transportation and freight logistics business. Our website allows you to post load or find trucks, post trucks or find loads . . .” For the most part, flexible transportation services are available on a regional level so a little research can put you in contact with a quick source for varying transportation needs.

Flexible warehouse space is a more widely known option; however, the communication platform (online and mobile scheduling) is expected to grow as companies look for low risk options for cost savings.

Regardless of how fast and wide spread online and mobile booking of logistics services becomes, I fully expect more national players to seize the opportunity to provide convenience and creative approaches to deliver more services on an as needed basis.

 

Executive Vice President Diron Raines leads client partnership engagement for nGROUP. Raines manages assessment and benefits case development to ensure a good fit prior to initiation of projects. He brings years of senior management expertise in strategy practice for a Big Four consulting firm, developing portfolio strategies, manufacturing strategy, operations planning and shareholder value analysis.

 

About nGROUP For over 25 years, the nGROUP Performance System for labor intensive functions has been adopted by executives in manufacturing and distribution facilities to solve business issues and achieve corporate objectives. As a consultant or on-site outscouring partner, nGROUP consistently outperforms other production methods, increasing productivity, quality and morale, and reducing labor costs by a minimum of 10-25%.

Scientific Evidence That Insourcing Yields Innovation

During the recent Council of Supply Chain Management Professional’s Conference (CSCMP), I had the pleasure to attend a breakout session conducted by Scott Graves, a PhD candidate at the University of Iowa. Graves presented his research on the pros and cons of Onsite Outsourcing – what we at nGROUP call Insourcing.

Naturally this was of interest since it is what we do here at nGROUP.  The spin was a little different in that it focused on transportation, whereas nGROUP focuses on labor inside the warehouse or plant. Despite differences in tasks, the relationship is the same; a third party operates within the four walls of a client’s facility alongside their team.

The subjects for the study were IPC, a Subway franchisee owned organization that handles their logistics, and CH Robinson, a 3PL that has a team in IPC’s facility working alongside their team to manage IPC’s transportation.

Grave’s findings were insightful and consistent with our experience working with clients.

Based on his research Insourcing yields increases in the following areas:

  1. Loyalty between client and vendor
  2. Visibility both ways (client/vendor)
  3. Responsiveness in reaching objectives and overcoming challenges
  4. Innovation in finding solutions (Thinking outside of the box)

 

According to Graves, there are four key considerations for insourcing success:

  1. Task and Outcome Dependence – Dependence forces interaction and engagement between both teams
  2. Role Clarity and Autonomy – It is essential that roles of the third party onsite team members are clear and they are able to carry them out independently.
  3. Commitment – Client teams need to have a sense of accountability for the program’s success.
  4. Physical presence – Third parties should have a designated area that is their own to work in but provides easy access to the internal team.

Most prevalent negatives when it comes to insourcing:

  • From a client perspective, there are barriers to exiting the relationship.
  • From a vendor perspective, they often find themselves giving away services that are not part of the compensation agreement.

The finding that resonated with me the most was the idea that Insourcing yields innovation; an elusive and highly valuable byproduct that is desired by every company. What companies are innovative to you? I bet it’s a who’s who of industry that comes to mind (Apple, Tesla, Google, Amazon…).

The concept that insourcing and innovation go hand in hand makes a lot of sense. Third parties like nGROUP can bring a greater depth of expertise in a particular area. In addition they have more focused resources that can speed up the rate of iteration.

In our world that means combining our operations management expertise with our client’s inherent knowledge of their business to develop new strategies. Then our implementation team can focus on the execution and ongoing management, while our clients focus on improving another critical area of their company.

 

Ryan Cates is Vice President with nGROUP performance partners. As an insourcing partner, nGROUP works with companies in a vested partnership relationship. For over 25 years, the nGROUP Performance System (nGPS) has been adopted by executives and managers in labor intensive industries to meet and exceed corporate objectives. nGPS consistently outperforms other methods, increasing productivity, quality, and morale, and reducing labor costs by a minimum of 10-25%.

The Grass IS Greener On The Other Side: Why This Football Fan Decided to Outsource

If you are like me, you are elated to hear the introduction song to Monday night football; look forward to ESPN’s College Game Day and get a little upset when the Fantasy Football app doesn’t work. As hard as I work during the course of the week, I look forward to pulling for my favorite teams during the weekend and recharging for the next week’s challenges.

I live in the South so this is also the time of the year that I need to repair my lawn from the harsh heat of the summer and do all the things that will ensure a green lush lawn come Spring. The problem is I’d rather turn my attention to football. I’m certainly more productive on Mondays if I’ve had a relaxing weekend. Last year I made a decision that ensures I could watch football without the pressure of yard work calling my name. I outsourced the care of my lawn.

Sure I can fertilize, put down pre-emergent, aerate, seed, etc. myself. Performing these tasks are not of particular interest, not something I enjoy, nor do I regard it as a good use of my time. The service on the other hand takes pride in their abilities, invests in the right materials and equipment, and will gladly perform the service for not much more than it used to cost me in materials and equipment. And honestly the yard looks better. By outsourcing, I met both of my objectives – a beautiful lawn and a recharged mind and body.

Every executive overseeing distribution and manufacturing operations has similar sentiments towards some area of their business; it’s important but they’d rather focus on other things; it’s generally painful to deal with, and someone else would probably do it better.

The concept of outsourcing a task, a work cell or even an entire operation is certainly nothing new. However, the landscape of outsourcing options has changed dramatically during the last decade. Most notably, insourcing has become a popular and effective way to meet corporate objectives by delivering record-breaking results and eliminating headaches while maintaining control on-site.

What is insourcing? Insourcing is when a third party manages a process inside a company’s facility, often alongside other processes that the company continues to manage. Traditional outsourcing is when a third party manages a process outside the company’s facility which is typically wholly managed by the third party (see comparison chart below).

Executives may choose to go the insourcing route because they’re concerned about loss of control and protecting the customer experience. There could also be issues with utilization of assets like real estate or equipment that the company is committed to use. Or the process they’d like to outsource may be a part of a series that it needs to remain close to. Whatever the case; they need it to stay in-house.

Conversely, the traditional outsource model means that the operation takes place in a separate facility with their own management, transportation and labor resources. Often the outsourced operation is not in even in the same city as the company.

Insourcing as a business model does provide many of the same benefits as traditional outsourcing while remaining at the company’s site. There’s a contractual agreement to a specific cost per unit, or a cost-plus model and the insourcing company is responsible for meeting all production targets. However, not all insource companies offer the same services, benefits and areas of expertise. nGROUP Performance Partners is a unique example of a company, with both a consulting and an insourcing services, that provides experts in engineered standards and efficiency, labor management with black and green belt certification in Lean Six Sigma, and employee engagement. Not only does nGROUP pay for themselves, they bring expertise to the table that saves companies money by increasing efficiency.

For example, as an insourcing partner, nGROUP was able to achieve a 30% cost savings for Sony Electronics Distribution Center in Carson, CA during a corporate initiative to significantly reduce costs.

 

By Ryan Cates, Vice President nGROUP

 

nGROUP has been making the grass greener for labor intensive industries for 15 years. Their award winning nGROUP Performance System (NPS) consistently outperforms other methods, increasing productivity, quality, and morale by reducing labor costs by a minimum of 10-25%. For more information on insourcing with nGROUP, please contact Diron Raines EVP at draines@nGROUP.biz, or Ryan Cates VP at rcates@nGROUP.biz.

Final nGroup Q & A: Break Out 5

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This is the last nGroup break out! We hope you’ve enjoyed reading the answers to questions we have commonly been asked.  If you have any others, please ask by contacting or tweeting at us @ngrouppartners.  Hope to hear your feedback soon!

How do you incent productivity without harming quality?
We put incentives in place and include disincentives for poor quality. Employees are only paid on first quality throughput and they lose incentive for passing on a product that is not up to standard.  Quality checks are also designed into the process. nGROUP understands the cost to quality, we can implement a program that reduces billing for sub-par quality and increases billing for exceptional quality. All product quantities and quality are confirmed by you as work is completed. This assures that quality processes have independent inspections.

How do I recover cost while investing?
nGROUP works with our partners to develop pricing structures that encourage investment and improvement.  The pricing structure results in the ability to easily cost justify improvements by evaluating investment vs. expected savings.

How do I capture year over year cost savings?
The savings are different in each location.  Operational improvements and savings are contingent on factors such as flexibility within the operation, extent of nGROUP’s services, work content changes from year to year, and the ever changing costs associated with labor.  It is typical to see savings of 3-5% from year to year.

What is the cost to use the nGROUP solution?
The only loser in the program is the inefficiency in the process.  If we cannot remove these inefficiencies and find a way to save you money, we will tell you that your operation is not an application. We do require a $10,000 upfront assessment fee but if we find that our program cannot help save you at least 10% we’ll fully refund the assessment fee.

How are new employees screened?
All employees are screened according to our client’s requirements.  This always include I-9 verification for appropriate work status and can incorporate full drug testing, background checks, and credit checks when required.

How does nGROUP train employees?
Training employees is a cornerstone of our program.  Each employee receives a location and client specific orientation package that includes a written training curriculum as well as hands on training on site.  nGROUP’s orientation program has proven to improve both productivity and quality for new employees.

How will nGROUP comply with all safety requirements?
nGROUP starts by mimicking our client’s safety programs.  We then utilize regional safety coordinators to assess risks and evaluate the program.  Specific risks are identified and improved so that we can maintain a safe working environment.  We also apply incentives for safety and ongoing safety results.

What happens if an nGROUP employee is injured?
nGROUP has a standardized process to ensure employees are treated at local medical facilities in a fast, responsible manner.  The onsite representative will work with the employee to certify the process is followed.

nGroup Q & A: Break Out 3

Can nGROUP help increase sales and be more competitive?
nGROUP’s program minimizes labor cost and improves key operational metrics such as turnaround time and quality.  This allows our partners to be extremely competitive versus the market.  In addition, outsourcing the operational components provides your team with the ability to focus on more strategic areas of your business.  nGROUP is also committed to continuous improvement  so you will continue to outperform your competitors.

How does nGROUP’s program affect our employees?
We focus on individual productivity within our program.  We only accomplish our goals with successful employees.  When appropriate, we are glad to discuss opportunities to join the nGROUP team in order to maintain the tribal knowledge of our client’s operation.

How do I maintain control of the operation?
During our assessment and implementation, the nGROUP team will interview important shareholders to ensure our partners are comfortable with the reporting structure, inventory handling, production tracking, or whatever information is important.  We also develop processes that confirm quality, production, and billing data with our partner.  Our quarterly business reviews (QBR) are always an opportunity to review and adjust what we all find important.  In the end, inventory, process, and product never leave your facility.

nGroup Q & A: Break Out 2

Why do you think you can do it better than we can do it?
Outsourcing is not a zero sum game.  Many organizations fail to understand that the sum of the parts actually exceed the whole. 

By adding nGROUP, you are bringing additional resources to your operation to enhance your overall performance.  nGROUP has experience working with market leaders across the nation where we have had the privilege to develop, learn, and utilize world class best practices.  In addition nGROUP is dedicated to the improvement of our client’s operations.  All of our resources are utilized and trained to optimize our clients operation.  The nGROUP team is continually updated on the latest improvements from across our partner base.  We also invest in continued education for our team, develop and continue to invest in technology, tools, and solutions to improve our service offering.  By working together, we create synergies and benefits that were not possible previously.

Why outsource your operation?
nGROUP focuses on operational processes within your facilities to reduce cost, while improving productivity, quality, service levels, and reducing liabilities.  We allow your current management team to focus on strategic issues rather than the day to day burden of production and labor challenges.  Our world class team and processes along with our partners ultimate insight ensures you maintain control and receive the service and results you desire.

nGroup Q & A: Break Out 1

How can I be sure we will receive savings with nGROUP and the pricing is firm?
Our approach allows us to be aggressive with our pricing structure and helps build our partnership on a strong foundation.  To start, during our assessment process, the nGROUP team will work directly with the major shareholders within the facility to understand the cost structures within the operation and ensure we understand the process flow.  We also complete engineering analysis through time studies, work observation and historical data collection.  Our engineers and analysts compare our findings and confirm our conclusions with you.    Our benefits case will be developed using the verified results.  

How does nGROUP help in the areas of compliance, regulations, and legal?
nGROUP’s program mitigates co-employment issues for our partners.  Because we hire, manage, and discipline our employees, we keep you protected.  By maintaining the operation on your premises, you do not lose control of your data and information.  Your IT infrastructure is utilized and you can make certain data is always secure.  nGROUP maintains strict documentation and confidentiality policy as an addition safeguard.  In addition to these compliance items, our safety coordinators work with your team to enhance OSHA compliance and develop comprehensive safety programs.  The largest impact is the control over co-employment issues.  Because nGROUP hires, manages, disciplines, determine work tasks and hours, we are the legal employer, removing our clients from the ever rising tide of employee litigation.