5S AUDIT.docx

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5S AUDIT

Business Process Transformation can be enabled by many methodologies and tools. One of these is5S.

5S provides a methodology for organising a productive work environment. This is a lean manufacturing tool enabling operators toimprove their efficiency through organising their work place.

Five S is driven by 5 Pillars of improvement

The Five S pillars:

Sort (Seiri)

Set in Order (Seiton)

Shine (Seiso)

Standardize (Seiketsu)

Sustain (Shitsuke)

For More information on the 5S pillars see below.

One of the first stages is to carry out a 5S Audit. This involves the use of Reg tags to identify unused objects that are cluttering thework place.

What is 5S

5s is one of the first tools you will use in your Lean Manufacturing program. 5S is a tool and system that helps improve theenvironment and efficiency of the shop floor. The same ideas can be applied to the office environment

Five S Sort

The first stage is removing the rubbish and clutter, it also involves cleaning and generally making the area tidy. By getting rid ofunused items space can be made and items that are used on a regular basis can be found quicker.


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Five S Straighten

Once you have cleaned the area out you need to ensure that the items left are kept in the right place. Tools should be located wherethey are needed and the utilisation of shadow boards to store them in set locations.

Five S Shine

Now you have got rid of the rubbish and organised your tools, you need to maintain your new found order. The area is their workenvironment and they should keep it clean and tidy. This is an educational program. To provide the education a detailed andcomprehensive 5S training program is needed

Five S Standardise

Once you have made the effort to tidy, organise and clean the work area you need to ensure your efforts and new found disciplinesare not let to slip. Implementing random and strict 5S audits should be used to maintain the standards.

Five S Sustain / Ongoing improvement

You have put into place the culture and systems to sustain 5S but you also need to look at continual improvements. You must

introduce the whole culture change, standards must be accepted through training and education and every one work to continuedimprovements as part of Lean Manufacturing.

An important part of any Five S program is to provide the complete operational staff with the required5S training. This should coverthe benefits to all members of the staff and how it improves their day to day

What is a Recession

Home> What is a Recession

Different economists define a recession term in different ways but in general they all agree that a recession is general

slowdown in overall economic activity, lasting long enough and universal in its character. In case of a recession

economical decline spreads across all country, distinguishing it from structural crisis in separate industries. More over

true economic recession can only be confirmed if it lasts for a period of two or more consecutive quarters in order to

nullify seasonal effects. Due to globalization of modern business recession easily crosses national borders and strikes

whole regions or World economy entirely.

A recession becomes visible through decline of all major macroeconomic indicators: GDP (Gross Domestic Product)

growth slow down or goes negative; production, investment spending, household incomes and spending decline while

bankruptcies and the unemployment rate rise.

Being a part of natural business cycle a reception inevitably follows any economic boom. Usually a normal business cycle

consists of four successive phases: expansion, boom, recession and crisis. Each phase is important for transition of a

cycle. Not only different social and economic contradictions gain momentum during a recession and crisis but also a basis

for future growth is build. Over long-term period, the highs and lows of business cycle form the trend, or average,

economic growth rate.

Numerous factors that may cause a recession could be divided in two large groups internal (endogenous) and external

(exogenous). The last one is represented by various force majeure obstacles of catastrophic nature: wars, revolutions,

natural disasters. Economy of agricultural countries may be influenced by climatic changes, crop failure etc. Economists
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working in the neoclassical tradition also consider State regulations, labor unions acts, business monopolies and

technological shocks as exogenous factors of a recession. In most cases external factors explain all crises prior to The

Great Depression in 1930s. The longest and deepest depression of the 20th century happened during period of political

stability and was caused by structural crisis in USA.

Internal causes of a reception could be resolved to accumulation of fundamental contradictions in an economical system.

For example, Asian financial crisis in 1997-1998, which lead to global recession, was caused by overheating of privatesector. Excessive investments in real-estate and production did not earn acceptable return. Large scale corporations used

political leverage to create so called cronyism where resource allocation is based on personal relationship between

managers rather than risk/return assessment. As a result foreign investors made risk valuation adjustment; overloaded

private debt coupled with capital outflow sparked currency crisis.

World financial crises in 2008 and current recession are also caused by internal factors. It was triggered by The United

States housing bubble extensive lending of American banks into high-risk subprime and adjustable rate mortgages

resulted in default rates overgrowth and downfall of banking sector financial indicators. Defaults and losses on other

loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy.

Bankruptcy of several high rated investment banks started panic on the inter-bank loan and stock markets. Rapid growth

of interbank interest rates and international liquidity crisis made serious impact on emerging markets, especially Russia

and Ukraine. Soon recession became global leading to GDP fall, heightened unemployment and economic hardship inmany countries.

Adequate government regulation may significantly reduce negative outcome of a recession. Experience of several last

years is carefully examined by international organizations and institutes. As a result new approaches to elimination of

existing global imbalances are formed. The OECD recommends to its member states to proceed with essential structure

reforms in order to improve transparency and stability of financial system. Countries will also need to deal with too-big-

to-fail problems associated with systemically important financial institutions, whose failures have exposed significant

vulnerabilities in many countries during the crisis. Other tasks are to achieve better capital adequacy and liquidity

standards; strengthen the quality of financial infrastructures; refining legal frameworks and to orient the investment

inflows toward the longer term.

It is important to remember that any crisis is exposure of structural misfits and is intended to overcome them by the

price of social and political shock. A recession shows weak links in economic system, destroys them and releases

resources for new undertakings. Decline in business activity forces companies to follow strict financial discipline,

abandon non-effective business practices, improve their productivity. It also opens a way for new ideas, technologies

and business models.

In simple words, recession is that state in which a country or a group of countries ran out of money.

Here no one basically knows that where the money has gone. When the recession term is used then it

is used for approximately the whole world and not for a prticular country. For a country we use GDP

and every country is having its own GDP.

Reasons:

1. First reality prices will move up surprisingly.

2. The public will mortgage the Houses and Properties and Banks will finance against property as per their

valuation.

3. The money taken as loan against property will be used to buy more property and the price of property

will move up further.

4. Getting easy money will dis engage people from the production process causing decline in GDP.

5. Trade Cycle business theory will first make the prices of property stagnant and thereafter when the

people will find it difficult to repay their loans, taken against property, they will resort to selling of

property so as to minimize their losses vis a vis loading interest cost.


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6. All the processes above will wipe out liquidity from the market as the liquidity had been created through

inflated funding against exorbitant prices of property.

7. Govt. and Central Banks (RBI in India) will bring down the interest rates to boost production and lure

the public from SAVING to invest in the open market.

8. Govts. launch developmental projects even financing through Fiscal Deficit Financing which may

become a source of further recession in future.

9. Once vicious circle of economy sets in then a series of measures have to be taken to control the

recession.

10. Only good agricultural production, industrial production and export of the produce, products and

services, self dependence, zero fiscal deficit and positive balance of trade can help a country to come out

of recession.

Overcome

1.Do not worry or panic

Most business entrepreneurs, professionals are too much worried. There is a saying that worry is a prayer for

something you do not need or what you do not wish for. Agree that the times ahead is the recession hit

economy. We have to pass through those situations however reluctant we are. Take this as an opportunity

given by God (If you believe in God that is) or any other supreme power you believe in, as a chance to prove

your mantle. Think how you can operate successfully in these times.

2.Don't spread negative thoughts on your share holders and employees

In most business establishments and companies, senior managers hold regular meeting with people below

them in designation. These regular and irrelevant meetings are not at all motivating and will only help spread

the panic among employees. At the end of the meeting, they too will have their own worries which will result in

them thinking only about their problems. This will lead even small issues grow large.

3.Do not publicize your cost cutting methods

You can't fight poverty to eradicate poverty!!! If you can see, most developed countries tried this method and

failed. The solution is not to fight, but to find ways to make/raise money. Also concentrate more on making

profits rather than on cutting the costs. Just do your cost cutting methods under anonymity.

4.Gain the trust of employees and share holders.

Make them understand the present economic situation. Educate them completely about the financial crisis the

world is facing. You have to cultivate confidence in them. Motivate them to think about ways to accumulate

more wealth. It is just not enough to have ideas and ideologies. You must also be able to implement and utilize

them effectively.

5.Increase marketing tactics

Focusing on yourself, customer satisfaction, keeping finances are all important. But when coming to this

recession time what you must keep in mind to strengthen or to increase with full vigor is your MARKETING

efforts. Marketing is what drives customers to your business be it small or large. Who knows for sure, maybe

this recession time will turn out to be the best year for your business. It is not only necessary that you derive

the maximum value out of each dollar you spend but also to get the return. You learn new techniques; adopt

new strategic marketing plans and so on. So get creative, increase your marketing and get the maximum out of

it.


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6.Get new customers to sustain your business

What makes a business a success? The customers of course!!! If you have customers you thrive, else you

don't. It is as simple as that. So what do you do to get new customers? Read how to get new customers for

your business.

7.Understand that this is a fight against the crisis. Infuse this thought in others as well

Make each and every employee, share holders a part of this open fight. Motivate them to give the best

operating results. Make them understand that it is in these times our true potential must come out.

8.Stay away from things that fill us with negativism

What we give our brain as input is what shapes up as our thoughts. So, during this recession hit times we must

be selective in what we see and what we read. Get together with people who might inspire you and at the same

way stay away from people who might have a negative influence on you.

9.Try to stay away from financial talks

If you are attending any seminars or meetings, try to ensure that the outcome of the meeting/seminar increases

your creativity and productive power. Try to stay away from talks which might include topics on how recession

can adversely affect a business or what all business will be affected by this recession.

10.Do not run away

When I say that you must keep away from discussions relating to slowdown, I don't mean that you must run

away from it or be completely ignorant of the topic. You must have strong idea on how the recession has hit

your business, how it may affect your business and how it has/will affect your business after you take methods

to combat recession.

11.Think a lot about future prosperity

In this world most things are available in plenty. People are making more money and wealth than people used

to make 10-20 years back. In future, 10-20 years from now people would make more money than even now.

This shows that nature has what we need for prosperity. Think about that and try to make the most out of it.

See how the gulf countries came up with nature's gift, OIL?

12.Understand that in any dire situation there is an opportunity

Take the case of most companies today. Most of them might have catered to a different business when they

started off. When they faced hard times they took advantage of the new opportunities by tuning their business

to suit the new needs. Find such new niche markets.

13.Fix your target

When challenges and hardships come most people turn their attention from their actual goal to their day to day

life. This is not the right way. During this recession it is your responsibility to uphold your mission and attain

your target

14.Make your "Mission" and "Vision" clearer. Convey it to your employees.


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These techniques will motivate your employees during the recession. This will also empower them and help

them stay away from negative thoughts. Make posters about your mission and vision and stick them on various

places in your office. Be creative with the posters; include some elements of fun and creativity in it.

15.Publish motivating articles and stories on your company newsletter/magazine

Let your employees derive inspiration after reading these stories and articles.

16.Uphold your company achievements

You heard me right. Just brag about your company achievements however small they are. When all the

thoughts are related to recession and slow down, then our eyes and ears will crave for more negative news.

That's human psychology. Your brain will like to think that your business will be impacted negatively. This will

indirectly reflect on your companies standings. Just go about flaunting even the minutest achievement of your

company.

17.Make of core team of similar thinkers

If you are the owner or CEO (Chief Executive Officer) of any company, try building a team of people who share

your same wavelength. Critical events must be discussed among this core team before it goes into

implementation.

18.Improve human productivity

This is the time to provide top class training to your employees and take their morale to an all new level. Do not

think the cost incurred in training your employees mentally as an overhead. Just think as an investment which

will yield the best results in the future.

19.Even your managers need training

How you overcome this recession will depend on how well you think. For the same reason you must consider

training your top level management staff as well. This may prove more costly and time consuming, but

eventually this is what will pay off more as the decisions which make or mar a company are usually the result of

this section of your company.

20.Have a clear idea of what you want from your business as well as your life

What you think is what attracts you. If you think the recession is going to bury your company deep down, well I

must say with utmost regret that it is going to happen in no other way.

21.Find a mentor or a coach

You need a mentor or a coach who sees problems and down times differently and one who motivates you.

Imagine going to a gym for work out (You are running a company). You are not alone in the gym (There are lots

of similar companies). You have fear of the dumb bells dropping on your chest (Recession hitting your

company). Yet you want to exercise because your profession demands it. (You have a company with many

employees and you want to move forward). You see people around you on whom the dumb bell fall and die

(Recession hit companies going bankrupt). How dedicated will you be? How much effort will you put into each

of your sets? How much concentration will be on your work out? Now imagine there is a trainer for you (A

mentor or a coach) who has a vast amount of experience and he guides you. He will support you in each set of


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work out ensuring that even if the dumb bell slips from your arms he is there to catch you. Now how much

MORE confident will you be? How much MORE dedicated will you be? You can take the service of mind

parlors which offer training for CEO's and business owners.

22.Read books that inspire you

You can read books such as The Magic of Thinking Bigby David Shwartz, The Power of Positive ThinkingbyNorman Vincent Pale orThe Power of The Subconscious Mindby Dr Joseph Murphy.

23.Open your eyes and ears

No opportunity must pass by you without you knowing about it. Only if your thoughts and attitude is positive will

you be able to recognize these opportunities and make the best use out of it.

24.Remember that for every fall there will be a rise

Don't crumble during this crisis. Stand up till you are back on track. This is the time to think and implement

tactics which will take your business to new heights.

25.Find out ways to cut cost

Research how you can provide the same quality while cutting down on production and distribution costs. Try

implementing virtualization, renting virtual office, cutting down on marketing etc. Surprisingly you may not even

have thought of such things yet. Take this opportunity to implement maximum ROI (Return of Investment).

26.Reorganize your thoughts for success

Control your thoughts and emotions and try to use it for only good things.

27.Find time for meditation and creative thinking

All inventions in this world are invented twice. The first time in some one's mind and the second time in

practice. So try to see things very creatively. Learn meditation. It will distress you and do you the world of

good.

28.Expand your operating areas

Expand yours and your employees operating areas. Haven't you heard that an idle mind is a devils workshop?

Even when America is undergoing recession, when insurance companies went bankrupt one insurance agent

was making his way successfully. When he was asked how he could do so much business in this recession hit

times his reply was "I worked hard and I got the results. You are saying this is recession time. What is

recession? Actually I don't know anything about it. Then the person who asked the question explained about

the recession and how acute the condition is now. The agent replied "Oh! Maybe that is why I couldn't see any

other agents in the field. Maybe that is why I got so much business. Got the point?

What Causes Recession ?

Slide 5:


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An economy typically expands for 6-10 years and tends to go into a recession for about six months to 2 years. A recession normallytakes place when consumers loose confidence in the growth of the economy and spend less. This leads to a decreased demand forgoods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment. Investors spendless as they fear stocks values will fall and thus stock markets fall on negative sentiment.


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5S AUDIT.docx