From a functional perspective, backflushing automates the issuing of material to the manufacturing floor upon the completion of the production process, which the ERP system defines as the point when the manufactured part is transacted into Finished Goods.
From a backflushing evangelist’s perspective, Backflushing is a way to significantly increase manufacturing efficiencies by eliminating manufacturing Work Orders and its associated task of issuing material to the Work Order.
How does Backflushing Work?
The actual backflushing process is really quite simple and contains a few basic steps:
MANUFACTURING LOGISTICS
Employees use the materials it needs to manufacture the quantity of the Part ID for a particular manufacturing schedule
Scrap is tracked
When the Part ID is ready to be transferred to another Inventory location (e.g., Finished Goods) the following information is entered into the ERP system:
Part ID manufactured
Quantity manufactured
Scrap incurred
ERP SYSTEM CALCULATIONS and AUTOMATED ENTRIES
The ERP system will reduce the amount of raw materials and/or any sub-assemblies for the:
Increase the inventory in Finished Goods for the quantity of the part that was manufactured
One can certainly make an argument that any one of the above examples where the prevention of an error, cost avoidance, and/or process improvement could very easily pay for the cost of an alerts module all by itself.
Follow-up Analysis and the Importance of Cycle Counting
By definition, if the BOM is accurate and all scrap is recorded, the only material manufacturing variance should be for any scrap recorded over/under the yield in the BOM. The only way to verify the accuracy of the backflush process is to establish and follow an efficient and regular cycle count program. If the cycle counts result in significant material quantity variances, then either the BOM is not accurate or scrap is not being recorded properly and corrective action must be taken immediately.
Keys to Success
To have a successful backflush process there are a few important things to ensure:
The BOM must be extremely accurate in terms of quantities, expected yield and structure (raw materials vs. sub-assemblies) and contain few if any variable components
Scrap for the production run are recorded on a timely basis
Production cycles are relatively quick
A strong cycle counting program is up and running
Tossing and turning at night is never fun, especially when the cause is concern over work related issues. There is an abundance of literature in medical journals regarding the negative impact on one’s health due stress or to a lack of sleep. Clearly, there would be a lot of demand for a product that could alleviate or even eliminate the stress and let you sleep at night. Even better if the cost of the product was reasonable and it actually allowed you to recoup your investment many times over.
I am sure you have heard the old axiom “if it sounds too good to be true, it usually is”. Well, in this case, I would say this doesn’t apply or at the very least it is worth your time to evaluate the product. What I am talking about is an alert system for your business, based on a set of self-defined rules waiting for an event to happen. The below are some examples of errors that could be prevented or actions that can occur with a proactive automated watch dog protecting your cash and profits while improving processes:
Shipping a customer order to European address with a US power cord
Notifying your sales people that one of their accounts just went on credit hold or is within 15% of their credit limit
A critical part in inventory just went below its safety stock level
An e-mail to your customers attaching the invoice for orders that shipped today
An e-mail to your buyer that notifies them about a new Engineering Change Order that will obsolete an inventory item and remind them as the cut-over date approaches
One can certainly make an argument that any one of the above examples where the prevention of an error, cost avoidance, and/or process improvement could very easily pay for the cost of an alerts module all by itself.
Another great example comes from one of our longtime customers. The owner was reviewing his records and was going back a few years to find something. By happenstance, he noticed that an invoice for a product shipment was sent that included a line item that had $0 for its list price. He couldn’t go back to the customer as the event was a few years in the past. This error literally cost him thousands of dollars. Right then and there he decided he didn’t want to even think about this happening again so “in order to sleep at night” he decided to purchase our alerts module.
The bottom line is the number of ways an alert system can help you and your business is almost limited by your imagination and creativity. How about a daily email alert that is sent at 6:00 every evening displaying the day’s bookings, shipments and cash collections amounts by customer?
A separate blog provides an overview regarding the five critical success factors needed to have a successful ERP implementation being:
Executive sponsorship/committee and support
Select a project manager
Cross functional team assigned
Training for all users
Test prior to “go-live”
The number one critical success factor is listed first for a reason. Without the CEO’s or COO’s full support of the project, the probability of success is dramatically decreased. A culture of Accountability with Consequences must be created combined with direct communication from the Company Executives. If the ERP implementation team and the rest of the company does not feel nor understand the sense of urgency and criticality of having a successful ERP launch, full participation from all business functions will not happen for the following five reasons:
Resistance to change
It is a well-known fact that people resist change at the work place (and in life) for numerous reasons including a) fear of the unknown, b) job insecurity and c) if they don’t understand the reasons for as well as the benefits to be derived by the change. Without the proper executive sponsorship, the wall representing resistance to change will be an entrenched obstacle.
Insufficient Communication
Two way communication with the Executive Sponsor is crucial in order to a) keep morale high even when a particular battle appears lost, b) provide strategic guidance and tactical direction to ensure that everyone is on the same page c) keep accountability high throughout the project, and d) inform the rest of the company of the progress being made as well as showing continued executive support and of the project.
Prioritization
Undoubtedly, along the way, there will be challenges for the company that appear that will test the company’s resolve of keeping the project on track keep it from getting derailed by all urgent matters that surface. All the company employees, managers will need to know that the Executive Sponsor is available to “make the call” and therefore have clear direction on task priorities in both the short and long term.
Performance Reviews
In most instances, an ERP system was obtained because the company is growing rapidly or needs to get the operations under control. Either way, employees are feeling stretched and stressed just trying to “hold down the fort”. Without Accountability with Consequences, employees will remain focused on getting their day-to-day jobs done at the expense of the ERP implementation as that is what they will be measured on come performance review time.
Measurement Yields Improvement
The old business adage of what gets measured improves is very relevant in this instance. Just knowing executives care and communication with executives will result in better results.
About the Author
Bob Swedroe is President and CEO of Expandable Software, Inc., a leader in manufacturing software development since 1983. Bob has held executive management positions at both start-ups and Fortune 500 companies including XO Communications, Silicon Graphics and Concentric Networks.
About Expandable Software, Inc.
Expandable Software, Inc. develops, markets and supports and enterprise resource planning (ERP) software suite designed to help fast-growing manufacturing companies maximize business performance.
Expandable’s fully integrated enterprise solution achieves a low total cost of ownership by delivering long-term deployment of a single system implementation.
With its unique model of direct sales and support, Expandable minimizes implementation costs and assures expert ongoing customer support.
Let’s face it; ERP evaluations, if done correctly, are extremely time consuming and often quite tedious. Hopefully, you have narrowed your ERP vendor list to a manageable few before you engage in a full blown demo with your extended team. Experience has taught me the time required for an overview demo is typically one hour. However, to complete a robust ERP demo is typically going to take a minimum of 4 hours and can, depending on the particular situation, easily take another 2-3 hours. Given this, I recommend that your full demo schedule should be limited to no more than the three ERP systems that made your shortlist.
Given the time commitment and importance of having a solid demo, clearly communicating your objectives for the demo to the vendor and the company’s attendees, in order for you and your team to be focused and can evaluate each finalist consistently. While there may be other objectives to consider, the final list really needs to include all the below items.
There is an adage regarding the three most important things to consider for successful real estate investing and opening a retail store or restaurant being location, location, and location. If the location is wrong, then the rest doesn’t matter. For ERP systems the three most important things for an ERP system selection are functionality, functionality and functionality. If the system cannot demo your required functionality in a manner that will work for your company, then the vendor needs to be eliminated from further consideration.
Therefore, the number one objective for any ERP demo is to determine if the functionality that you require to run your business exists can be demonstrated.
Functionality matching your ERP requirements: There are many things you cannot determine from a demo, including the quality of the application, the quality of the vendor’s customer support organization, and the scalability of the ERP system. However, you can clearly determine if the functionality that you require exists. All you have to do is ask to see it. The remaining objectives of the demo are all about understanding as much as you can about the company that will be supporting you during and after the go-live event. In some cases, it will be the ERP system company itself. Alternatively if might be an ERP system reseller that will be providing supporting. While the benefits of having direct support from the ERP system company itself are important, that topic is for another discussion as the remaining two objectives for the demo are almost the same.
Understanding your business: Does the ERP system company understand your specific business requirements, business model and your industry? Can they provide insights into your known issues as well as insights into issues with which you are not even aware that you have or will encounter in the near future? In essence, the ERP system vendor should know enough about your business to provide a very relevant demo and act as a catalyst for thought provoking discussions. If the ERP system company doesn’t “get it” when they are in the sales cycle trying to win your business, how likely are they to spend the effort after they win your business? Without understanding your business, they will have a tough time fully grasping the issues that you &/or your industry encounter. This will severely limit their ability to be an effective business partner and recommend best practices. In addition, if the industry knowledge is lacking, the likelihood their R&D product roadmap covering features and functionality important to your company and your industry will be greatly reduced. If you are considering using a reseller, the one difference to consider is that if the reseller does not understand your business well enough, will they be strong enough advocates to the ERP system company to champion roadmap features and functionality that are important to you?
Problem Solving/Listening: During the demo it is important to try to see evidence that a problem solving culture exists in the ERP company presenting. Are they really listening and are willing and able to discuss unique functionality or processes that are, will or might become problematic in the near future? Can they provide answers during the demo or even after the demo (once they have had a chance to discuss the issue more back at the office)? Do they quickly respond to all follow-up questions? The discovery objective is to try to determine if the ERP company has the DNA to make your problems their problems; i.e.be a strong business partners that won’t disappear once the sale is made. This objective should be followed up by reference checking for validation, but first-hand evidence might be a good indicator as well.
Wouldn’t it be nice if there was one managerial style that you can use for your staff as well as your supervisor? Well, there is; it is called flexibility or adapting to the particular person for a particular assignment.
There is a widely accepted theory based on a learning process model that has four stages (along with my very simplistic definition for each stage) that is listed below:
Unconsciously Incompetent (Stage 1): Do not know what you do not know
Consciously Incompetent (Stage 2): Know what you don’t know
Consciously Competent (Stage 3): Know how do it, but you have to think about it
Unconsciously Competent (Stage 4): Know how to do it without thinking about it and can see a few steps ahead
While these stages are very interesting, the real value is around using these stages to adjust one’s managerial style for each individual on your staff and which Stage they are in while working on their current assignment(s). For instance, if you had a newly hired employee that had minimal or no relevant experience in the area required for their current tasks (Stage 1 of the learning cycle), the best managerial approach would always be directive with minimal coaching. In essence, since the employee does not know what they don’t know regarding the assignment or with the company’s appropriate policies and procedures, it will be necessary to tell the employee what to do, how to do it, why they are doing it, and why they are doing it this particular way. This approach will facilitate the job to be completed correctly, on time, and teach the employee to enable their progression to Stage 2 for this task.
On the other side of the spectrum, let’s assume the employee assigned to the task has been with the company for a long period of time as well as having previously completed the same assignment numerous times; i.e. in Stage 4 of the learning cycle. In this instance, the managerial approach applied has to be completely different if you want to avoid undesirable outcomes least of which are being labeled a micro-manager and running the risk of completely demoralizing the employee as they easily can reach a conclusion that you don’t trust them to do the job by themselves.
Given the two extreme examples above, always consider the particular situation before deciding which managerial approach to use whether it is Directive (Stage 1), Coaching (Stage 2), Supporting (Stage 3) or Delegation (Stage 4). This thought process should be used for each assignment, because an employee might be in Stage 4 for one assignment, but in Stage 2 for a different assignment. The ability to be flexible and adjust your managerial style for each specific situation will make you a more effective manager and your staff’s productivity and morale will be the beneficiary.
On another level, you should use the same approach to manage your supervisor, if you feel they are “playing in your sandbox” too often. If you had a discussion with your manager on this subject, they might be willing to take a step back and change their approach. If however, they continue to micro-manage you, I suggest asking your manager why they don’t trust you to do the job as you believe that you are in Stage 3 or 4 of the learning cycle. If the answer is not satisfactory, then you most likely have a manager who only has a single managerial approach called micro-managing. In this instance you have to decide whether to “tough it out” until you change managers, try to find another position in the company or at a different company.
Wikipedia: http://en.wikipedia.org/wiki/Four_stages_of_competence Purchasing: By providing the ERP system with approved ECOs and new product design BOMs, the Purchasing department will be in position to modify their inventory purchases to account for the change in the BOM. In fact, the ERP system itself should be able to provide a purchasing employee with a warning if they are entering a purchase order for an inventory part that has a ECO that has been approved. These two examples serve to highlight the power and the importance of solid integrations between applications where the information in one of the applications is important to users of another application.
While there is no hard and fast rule on what is acceptable or required, most companies categorize their inventory into three classifications; 1) “A” items which typically represent 15-20% of the quantity and 75-80% of the total inventory value, 2) “B” items which usually comprise 15-25% and 10-20% of the quantity and value respectively and 3) “C” items comprising the balance and therefore having about 65-70% of the quantity, but only around 5% of the value.
This inventory value distribution is used primarily for inventory control purposes. Inventory control can include various forms including how tightly a particular inventory item is secured and the accuracy of purchase quantities and cycle counting. In essence, the main purpose is to focus a company’s inventory control on mainly the “A” items, less so on the “B’ items and even less on the “C” items. For example, a company may decide to cycle count their “A” inventory once a week or once a month, the “B” inventory once a quarter or twice a year and the “C” items once a year. Similarly, the “A” inventory items will get the most review and analysis of the purchasing recommendation provided by the MRP.
The benefit of focus is the reason why most companies do categorize their inventory in this manner. Without this tool manufacturing, purchasing and finance personnel will end up spending an inappropriate amount of time reviewing purchases and cycle counts on parts that do not warrant such attention.
The “D” category (which I chose to define it for this blog) mentioned in the title is a bit of a misnomer as it really is not a category, because it represents items of such little value they should be expensed upon receipt; i.e. not classified as inventory for financial reporting purposes. A good example of such “inventory” would be any inexpensive nuts, bolts or washers. Obviously, for “D” parts there would be no need to cycle count nor spend a lot of time analyzing the inventory as the decision was already made by management to expense it.
With the above as context, a reasonable question that finance and manufacturing should ask is should we reclassify some of our existing “C” inventory to a more appropriate expense item. By definition, there will be a one-time charge to the P&L when the existing inventory is expensed, but the charge should be immaterial given the low-value of the parts being reclassified.
Bottom-line: at a minimum, a once a year review of all your inventory items should be done so that all parts are classified appropriately in order maintain the appropriate level of management and control of the inventory. This review should also include analyzing “C” items to determine if certain items should be expensed upon receipt.
Executive sponsorship, committee and support
Select a project manager
Cross functional team assigned
Training for all users
Test prior to “Go-Live”
Executive Sponsor
Without the CEO’s or COO’s full support of the project, the probability of success is dramatically decreased. A culture of accountability with consequences must be created combined with direct communication from the Company Executives. If the ERP implementation team and the rest of the company does not feel nor understand the sense of urgency and criticality of having a successful ERP launch, full participation from all business functions will not happen.
Project Lead
The project lead should be a person with broad knowledge of the company’s business, processes, have the ability to articulate the ERP solution vision, have respect of the executive sponsor/committee and the personality strength to work with and ability to communicate effectively across functional lines, the implementation team, and the Executive sponsor/committee. The project lead needs to be a strong communicator and have the ability to eliminate the resistance to change which will arise. The ability to communicate, coach and act decisively cannot be emphasized enough.
The project lead should be a key operational stakeholder. From my experience the project lead typically comes from the manufacturing, finance, or IT organization. I strongly recommend an IT employee not lead the project for a few reasons including the greater likelihood the project will be viewed as a corporate IT project (which it is not), even the best IT employees do not understand the working requirement nuances of manufacturing and finance well enough, and it places the accountability on a support function as opposed to the people who will be responsible for the project’s success.
Cross Functional Teams
Core Team: It is imperative that an adequate number of key personnel from all impacted functions be assigned to the core implementation project team led by the Project Lead. These core team members will be relied upon to make/communicate critical workflow decisions, obtain input at the appropriate time, and communicate decisions and status to the functional working team (discussed below).
Functional Working Team: Best practices have a separate working team for each function, led by the function’s Core Team member. The Core Team member’s responsibility to:
Be the project manager for the function
Uncover any “gotchas” that need to be addressed prior to the ERP system go-live event
Communicate appropriate issues raised by the functional working team to the Core team
Drive tasks and open issues to closure
Ensure adequate resources are being assigned to the project within the function
Motivator and cheerleader for the functional working team members and across the function company wide.
Training
Lack of proper training is one of the biggest reasons for failed deployments. Inevitably, users will be frustrated by their decreased productivity, inaccurate information and reports, and will ultimately blame the software for being too difficult to use.
The old British proverb penny-wise and pound-foolish is a perfect description for companies that invest a great of time and money to obtain an ERP system, but decide to save some money at the end by skimping on training. A few of the obvious benefits that will increase the probability of having a successful deployment by orders of magnitude, which proper training provides are:
Educate users how to use the system in their functional area. This will accelerate the learning curve on the proper and optimum way to use the system which leads to increase productivity
Provide users knowledge so they understand the impact of any errors they make on other users and the company
Reduce the level of frustration and angst in learning the new system
Without proper training, the chances of having a smooth and successful launch will be greatly reduced. In addition, improper use of the system will rapidly spread throughout the company has new employees will be instructed on improper use.
Test Prior to Go-Live
Testing should occur during the period between training and system Go-Live. Sufficient testing serves many purposes including making sure the users know how to use the system properly, the work flow processes that are going to be implemented are efficient, and the results are accurate.
If an issue is surfaced during the testing period, then more training is required, a work flow process needs to be modified; which may require additional training or perhaps a system setting or configuration needs to be modified.
About the Author
Bob Swedroe is President and CEO of Expandable Software, Inc., a leader in manufacturing software development since 1983. Bob has held executive management positions at both start-ups and Fortune 500 companies including XO Communications, Silicon Graphics and Concentric Networks.
About Expandable Software, Inc.
Expandable Software, Inc. develops, markets and supports and enterprise resource planning (ERP) software suite designed to help fast-growing manufacturing companies maximize business performance.
Expandable’s fully integrated enterprise solution achieves a low total cost of ownership by delivering long-term deployment of a single system implementation.
With its unique model of direct sales and support, Expandable minimizes implementation costs and assures expert ongoing customer support.
One of the more common axioms in the manufacturing world is “Inventory is Evil”, because too much inventory can only lead to problems. The most common problems often sited are the cash consumed purchasing the inventory, increased warehouse costs to store excess inventory, higher obsolescence write-offs when a particular part is classified as obsolete or inactive, and extra manpower to count, review and manage the inventory.
So, how does a company, even a well-managed one, get into inventory trouble in the first place? Two obvious reasons include poor forecasting by sales and unexpected inventory obsolescence due to a technology change. However, to list all the potential reasons for high inventory levels is beyond the scope of this narrative as the intent is to help you to discover ways to reduce your inventory levels without making overhauling your current basic processes; in other words quick fixes that can have dramatic results.
One of operations’ key responsibilities is to ensure the appropriate level of inventory is on-hand to support sales. With this in mind there are four important points to consider:
The main tool that operations use to recommend inventory purchases is Material Requirements Planning (MRP).
The basic assumptions that drive purchase recommendations by the MRP are forecasted total sales, sales orders already in backlog, bill-of-materials (BOM), vendor and in-house lead times, and safety stock levels.
The basic stereotypical trait of most manufacturing people is risk avoidance
The general philosophy of most companies, particularly companies experiencing high growth (e.g. start-ups), is to not lose a sale due to lack of inventory. In addition, it is my experience from working for manufacturing companies in fast paced Silicon Valley, a manufacturing manager or purchasing employee is much more likely to get fired for missing a sale than ending up with excess inventory. Playing it safe thereby becomes a basic survival strategy.
Since the BOM, including yield percentages, always needs be accurate as possible and backlog is a known quantity, operations have only a few remaining ways to insert some conservatism (i.e., playing it safe) into the MRP output. They can increase the demand side of the calculation by nudging the Sales forecast up a bit or increase the supply requirements by ratcheting up either the lead times or safety stock levels of all purchased and manufactured inventory.
The analysis and impact of safety stock is pretty straightforward so I won’t spend much time here, but lead time is a bit more challenging and therefore probably warrants a more frequent review than safety stock levels. In fact, Supply Chain Digest published an article on May 4, 2006 titled ‘The Impact of Lead Time Variability’ highlighting “Preliminary Research out of Georgia Tech finds there’s a lot more variability on inbound deliveries than many companies may realize” and as Georgia Tech’s Dr. Donald Ratliff noted that “not only does lead time variability impact a variety of supply chain cost and performance metrics, the impact of variability is actually greater the more efficient a company’s supply chain is.”
That is a rather thought provoking mouthful. In essence, even though lead time variability impact is more prevalent than believed, the impact is greater on well-run supply chains.
Given that a very common way to be conservative in inventory planning is to increase lead times and the implications on lead time variability per the Georgia Tech study, it warrants a more frequent review than it probably is receiving today. To complicate matters just a bit, there are numerous places where lead times can be used or “hidden”. However, a great place to start is the lead time for the receiving department to receive inventory and then place the item into its appropriate stock location in the warehouse. Depending on your particular situation, this particular lead time might even be considered superfluous, because if there is an urgent need for specific material, manufacturing will not only be aware of its arrival at the dock, they will find a way to expedite the material out of receiving and onto the production floor.
Coming from my finance background, conservatism does have its place. However, the impact of being conservative should at the very least be understood by all so that any conservatism becomes a conscious decision by the executive team. For example, let’s assume that the annual COGS for a company is $10,000,000 and the inventory level is $2,500,000. This equates to an inventory turn of 4.0 or having 91.25 days of inventory on hand. If the company has a 1 day lead time for material receipts, then by eliminating this lead time, will by definition, reduce inventory to 90.25 days in inventory. This reduction will result in an inventory being reduced by 1.1% / $110,000 as the company’s MRP will now calculate the inventory purchase requirements based on a shorter lead time.
Bottom line: both lead times and safety stock are typically set and reviewed infrequently. However, as their impact can be a significant drain on cash and a cause of an increase in inventory obsolescence expenses when parts are classified as inactive, they both should be reviewed and analyzed for appropriateness and accuracy at least once a year to ensure that all inventory conservatism is known and understood by all so that appropriate action can be taken.
The three main benefits of lean manufacturing, if implemented correctly, are 1) a reduction in inventory levels 2) it exposes inefficiencies on the production floor and 3) it reduces waste. One of the key elements of lean manufacturing is the deployment of a Kanban system.
While there different types of Kanban systems, a simplistic definition is it represents a Demand-Pull production approach where customer orders dictate what is manufactured as opposed to the more traditional Demand-Push where the manufacturing organization is tasked with producing specific quantities for specific parts to meet an approved sales forecast for a given period. One of the critical keys to success of a Kanban system is to have an efficient/effective Just-in-Time inventory system so that inventory can be delivered to the factory quickly to satisfy inventory requirements for an order received.
Technically, a Kanban inventory system uses a Kanban (a graphic or visual signal; e.g. color coded cards or lights) that indicate to manufacturing to produce another unit or to replenish inventory on-the-manufacturing-line. Its intent is to minimize inventory levels on the manufacturing floor and to control the quantity of production for a particular product.
A simple example is described below in Scenario 1:
An order is received for 10 units of Part A
Part A’s top level Bill-of-Material is sub-assemblies B plus one Part C
The manufacturing floor is comprised one line with a 3 step process:
Process 1: Build sub-assembly B
Line 2: Build Part A (Part B + Part C)
Test
Scenario 1
The manufacturing process would be:
Issue a Green card to Line 1 to build 10 units
In-line inventory actions:
If all inventory levels were sufficient at the time the green card was received, use in-line inventory to assemble 10 of Part B and 10 of Part A
If after manufacturing the order, additional in-line inventory is required the impacted manufacturing location(s) will post a Red card.
In comparison, if a Work Order system is used (Scenario 2) then the below manufacturing process would be used. The important element in this scenario is the 10 units for Part A were considered part of the 100 unit forecast that manufacturing used in their production planning.
Scenario 2
The two biggest risks that often are associated with Kanban are 1) if a large order quantity is received, the Kanban system may find it difficult to produce the required quantity in time for the requested delivery date to the customer and 2) If the manufacturing production cycles are long the manufacturing floor space required to keep the production flowing might become extensive.
The value of presenting properly cannot be understated. This is your chance to be viewed as a significant value added member of the team and demonstrate your level of expertise.
Over the years, the below practices have worked extremely well for me. In addition, my observations of other presentations where the presenter did not fare very well was due to not following one or more of these practices.
1. Know your audience
As with any presentation, this is extremely important. Your entire presentation material and presentation style depends on your audience. For instance, a presentation to the Board of Directors would be vastly different in terms of slides, detail, preparation and context than a presentation given to a large group of other finance people.
In addition, a smaller group presentation will be subject to more interactions and therefore knowing each individual attendee can be just as critical. Using the Board of Directors presentation example again; knowing each board members tendencies, mannerism (indications of silent clues of agreement or disagreement), and overall knowledge or bias on a particular topic will help make a presentation go smoothly. The key is to avoid being blindsided by an objection, question or being forced to go down an unexpected path which can abruptly turn a smooth meeting into a very contentious meeting.
2. Know the material backwards and forwards
The presenter needs fully understand the material, any numbers and all the key trends, metrics and variances vs the plan or forecast. You do not want to be just reading the information off the slide. The audience wants to know the story behind the material or numbers. You need to provide the proper narrative as to any important events/milestone and the cause of any material issues or variances (both positive and negative). Are the issues or variances one-time events or will they be recurring?
The ramifications of the issues, depending on their importance, might very well be a topic of discussion By highlighting the possible consequences of not addressing the issue, will at a minimum, ensure the issues are discussed, monitored, resolved or optimally mitigated. Given this, you should be prepared to address the issue in some detail.
One last very important point for this section, if you don’t know the answer to a question, it is better to respond ”I don’t know; let me get back to you” or “I don’t know all the nuances to provide a proper answer, so let me get back to you” than it is to respond with an answer that is not correct. An incorrect answer will cause a hit to your credibility and everything you say after that as well as before that will become subject to suspicion with regards to its accuracy. Of course, you don’t want to be using the “I don’t know” response too often as that as its own negative implications as well.
3. Have answers to questions before they are asked
During preparation of the material, you need to be able to review the slides and ask yourself what questions are likely to be asked during the presentation. This is where knowing your audience and understanding the material and numbers come into play.
By reflecting on the slides, knowing the audience and the details well enough you should be in good position to review the slides and determine what questions are obvious and as well as what questions might surface. This will put you in position to present with confidence and to respond quickly. The better you are able to do this, the higher your credibility to the audience will be.
4. Issue Handling
Undoubtedly you will be in position to have to be the messenger of bad news. Depending on the situation (e.g., presenting to the Board of Directors), it is usually very wise to provide a heads-up prior to the meeting to the board members individually. This accomplishes two things: a) nobody likes negative surprises. By providing advanced notice, it will help control emotional responses during the meeting and b) It will give each Board Member to reflect on possible solutions or provide guidance during the meeting.
While presenting bad news cannot and should not be avoided, it is far better to present the problem, but then follow-up with action plans or possible solutions to solve the problem. In other words, don’t simply announce and give the problem to the attendees. Instead, demonstrate your leadership by owning the problem, whether as a team or individually, as appropriate.
5. Practice, Practice, Practice
This presentation adage has been around for a long time, because it is so valuable. The more important the presentation, the more practice is recommended. The benefits that practice provides include:
Cutting or rearranging slides if the material does not flow smoothly or does not paint the picture you are trying to convey
Provides the opportunity to deliver the presentation until you feel comfortable with the material, script and the message so you don’t have to read the slides. You want to face the audience and talk to the slides with confidence
Allows you to time your presentation assuming there are no questions. This will give you a sense if the number of slides or talking points for each slide needs to be modified so that your presentation can be completed in the time allotted
