Mar 21, 2011 | Innovation, Lean, Marketing
This is an expression I have used for many years, it is just a metaphor for never throwing out an idea, leave it available for scrutiny later when you know more, or for parts to build something different, or just for inspiration when building the portfolio of projects
The brainiacs in Silicon Valley have now come up with a better expression, “Strategic Pivot” which is essentially the same thing, but geared specifically to innovation in the digital world. Perhaps unfortunately for silicon valley, not every innovation is a new app, most are far more mundane.
A new way of moving a product WIP from one production station to the next can be an innovation, as can an improvement in the process of collecting data on that movement, and further improving it by removing excess time and effort.
In either case, the metaphor, whichever one you choose, works. Never throw out an idea, just because you cannot see the value now.
Mar 3, 2011 | Customers, Lean, Operations
Articulating a Customer Value Proposition, understanding which activities add value to the customer, and which do not, is core to any successful marketing activity. However, so many CVP’s I see are a bunch of words dreamt up over a beer, and have little to do with how a customer interacts with, uses, and values a product 0r service.
There is a relatively simple way to measure a CVP, a ratio of the Money spent that adds customer value, divided by total money spent, a CVP ratio! I am indebted to Bill Waddell for the idea, and like most great ideas, it is simple.
The notion of waste is a foundation to Lean thinking but can get tangled up in the definition of what activities are necessary to run an enterprise, but do not add value to the customer, and those that are just waste. However, having made the distinction, and done a bit of customer research, you can now put a number on the value added, and track it over time.
Should keep the accountants and MBA holders happy, and unlike many measures those numerator driven types grasp, will add value.
Feb 8, 2011 | Change, Collaboration, Lean, Operations
Typically, we see things in an “either/or” context, you can do one thing at the expense of another, take your choice!. You can have line efficiency, or line flexibility, not both, advertising reach or frequency against a narrow target, but not both in the advertising budget, covering inventory requirements of A, or B by the end of the week , but not both. Happens very day.
This trade-off is programmed into us, but has the unintended consequence of “allowing” shallow problem analysis, facilitating our “jump” to a conclusion, rather than going through the hard work of real problem articulation, consideration of many possible solution options, and the testing and recalibration of hypotheses that should occur and re-iterate to identify where more data is needed, more ambiguity dissolved, and more responsibility taken.
When was the last time you acted too soon, and laid all your bets on a single obvious solution being the right one, only to find the siren song of “easy and obvious” led you astray?
I first came across this phenomena in the late 80’s (to my younger readers, some of us were working then) when my then employer was running “Ski” yoghurt down a new form/fill/seal machine designed for long runs to meet the demand in France, where the machinery was made. Run raspberry yoghurt for a few days, and it worked wonderfully, great in France, but for us it would have been a years stock, so we had to change flavors after little more than what would have been a changeover run in France, in many cases, less than an hour, with the attendant changeover times and start-up/finish-run inefficiencies, which the French engineers assured us were “absolutement” unavoidable.
Over a period of time, in a structured and progressive way, our fitters and operators who ran this piece of French engineering revenge on the rest of the world, using what would now be described as a PDCA continuous improvement cycle, made that machine do what its makers said was impossible, and we got both efficiency and flexibility out of it.
Either/or was not good enough, progressively, with many small steps, a great deal of experimentation, and recognition that the operators often had a better view of the intricacies than an engineer working off a plan, it evolved it into a “both/and” machine.
As a result, we made pots of money, because we had very low inventory levels, almost 100% order fulfillment , and an increasing market share because our customer service to big retailers was better than our opposition, and the consumers loved the product. Truly a lean virtuous circle!
Jan 31, 2011 | Branding, Lean, Operations
I’ve written a bit over time about the value of a unifying business purpose, the way it can unify and motivate the stakeholders of an enterprise, often beyond the boundaries of just employees.
It is all easy to say, but apparently very hard to do, as the number of mission statements, and articulation of business purpose that are around that are no more than a bunch of cliches written on a whiteboard in some strategy session simply because it is on the agenda of things to get through.
Tom Fishburne again nails the notion of business purpose as a cliché in this cartoon, one picture tells the story of most efforts.
The video embedded in the copy around the cartoon is worth a look, it articulates via the story of Raleigh jeans the value of a real purpose as opposed to a confected one. The video also addresses the notion of manufacturing being brought closer to the geographic source of the business purpose, another hobby horse, as I see the beginnings of supply chains contracting around local capabilities, rather than being outsourced for apparent short term cost benefits, without understanding the long term implications.
Jan 27, 2011 | Change, Collaboration, Customers, Lean, OE, Operations
Lean is at its core a management system, a holistic way of looking at the way an enterprise manages itself through a culture tuned to improvement, group and personal responsability, while six sigma is a quantitative process of managing in quality by getting it right first time.
Six sigma quality requires 99.997% perfect, or 3.4 defects/million. When you are manufacturing and supplying to customers even simple products, this is a very high bar indeed.
Motorola was the first US company to recognise and articulate the challenge in the face of Japanese competition in the 80’s, and they boomed, becoming the gold standard for western manufacturing, and inspiring thousands of others to lift their performance, from which we have all benefited. The article that first bought Motorola to public attention is this Fortune article from 1989, and it started a revolution.
Now the revolution appears to be over as Motorola is broken up into two separate listed companies after almost 2 decades of failing to build on the foundations built in the eighties. The leadership that followed those that built the foundation did not recognise the importance of the management systems necessary to support the continued improvement and Motorola fell back into the trap of conventional management accounting where inventory is an asset, cycle time and flow ignored as core metrics, functional management over-rides bottom up innovation, and all the other stuff that makes a lean environment work, got squeezed out.
As I work with clients on improvement initiatives that usually start with marketing and strategy, my patch, the necessity to improve operational processes to support those that engage with the customer is always a major driver, and the failure of Motorola after being the icon it was simply drives home the difficulty of not just improving current performance, but in the process, building the management and leadership processes that make the performance improvement process self sustaining.
Dec 20, 2010 | Demand chains, Leadership, Lean, OE, Operations, Strategy
The next time you hear an argument that justifies moving Australian manufacturing to a low cost country in order to compete, refer to this post on the Evolving Excellence blog describing the work practices in a Toyota’s Kyushu plant.
Labor is much more than a pair of hands doing a repetitive job, it is an opportunity to improve processes and identify and solve problems before they can impact on the customer, or even the next bay in the production line.
It may be hard to get to this point in Australia, but you will have no chance of making the changes necessary in a contract manufacturers plant in a “low cost” country. The accountants will generate their numbers, which can be pretty persuasive until you recognise that they do not account for the things that make a difference in the market, or count the wasted time, emotion and energy in their “productivity” calculations.
When an abundant country like Australia becomes a net importer of food, we have a real structural and strategic challenges in our demand chains that urgently need to be met, and the sooner we recognise the scale of it, and do a bit more than just mouth platitudes, the better.
