The feasibility study consists of the following steps:
- Defining the Problem
- Brainstorming Possible Solutions
- Developing Criteria for the Solution
- Evaluation and Selection of the Solution
- Assessing the Solution’s Practicality and Benefits
- Making a Plan
It starts with defining the problem. It ends with a plan.
A lot of people make the mistake of ending a feasibility study with a solution.
After they have the answer, many of them neglect to ask “what’s next?”
They rely on the stakeholders to figure that last step out. That’s a big mistake because most of the time, the stakeholders have no clue as to how to do so.
The process of finding a solution begins with brainstorming. This is already controversial as some would argue that one should first set criteria for whatever idea or answer is presented.
What inventory and procurement policy should we establish?
- Buy only when customer orders?
- Eliminate all items except ten (10) fast-selling products?
- Keep no stock of top 20 most expensive items to make?
- Have a single exclusive vendor for each material item and make vendor accountable for inventory?
- Have at least three (3) suppliers per material item purchased and keep at least one (1) month’s equivalent worth of sales per item?
- Put all inventory on a huge container vessel that would constantly be at sea and move from one port to the next to load and unload merchandise?
Brainstorming comes first because it is a no-holds barred free-thinking exercise that allows minds to capture all the thoughts possible to address the problem. Nothing is filtered or evaluated. Every thought is acceptable and listed.
Criteria comes afterward but they should relate to values, principles, and strategic objectives.
Examples of Criteria:
- Solution has to be easy to implement;
- There should be minimal risk in running out-of-stock;
- There should be minimal investment in training and education:
- Material costs should not increase;
- Working capital should decrease.
Brainstormed ideas are then filtered based on the criteria. Those that obviously wouldn’t fit are thrown out outright. The ideas that qualify would remain.
The remaining ideas then pass through an evaluation process.
The evaluation process is mostly an intuitive one. Whereas defining a problem depends a great deal on data gathering, analyses, and presentation of evidence, evaluating candidates in search for the best idea or answer to a problem is mostly done via perception and insight.
We weigh candidates against the criteria we developed earlier. The weighing is an attempt at rational calculation but most of how we do it is based on opinion. We predict benefits on what we think will happen, not really with any rationale.
A feasibility study is a contrast between the rational definition of a problem and the intuitive search for a solution. That’s why as soon as a solution is selected, we need to refine it and move forward to developing it into a plan on how to make it into a reality.
Refining the selected solution or idea is simply clarification of what we think needs to be done. Whereas a problem is best described in the form of a question, a solution should come out in the form of an action plan.
As an action plan, a solution or selected idea should follow a SMAC format. It should be Specific, Measurable, Attainable, but Challenging.
We will develop an ABC Inventory & Purchasing Policy.
A feasibility study ends with a plan, not a recommended solution. Solutions are intuitive but a plan brings it into reality.
With a plan, an organisation will know what to do next.