U.S. Manufacturing

As far as blogs go, some are good and very many are mediocre. Even in the good ones, not all posts are equal. But occasionally, you come across a very good post that should be shared. And that's what I'm doing here.

Derek Singleton at The Manufacturing Blog writes about 5 Strategies for Growing as a Domestic Manufacturer. He makes some good points.

I would have added Improve Your Processes as a separate item, where he includes it under Invest in Your Workforce. Investing in your workforce brings many benefits that will help to boost productivity, which can include process improvements because of increased training. But I think process improvement should have its own focus. It is a vital, and ongoing, activity that is imperative at any time, in good times or bad.

I could make further comments, but you should read the post first and let me know what you think.

Hard Times Offer Chance - Now How To Improve

There’s nothing more motivational for a blogger than to know that someone is reading your blog. And when they ask for more, or a follow up to a post, that will keep you going for a while. Sexy Lady (?) wants some follow up on the Hard Times Offer Chance to Improve post. Thanks for reading, and sorry for the delayed response.

Kaizen is the term for Continuous Improvement. This is a fundamental principle of the Lean Management system, and for good reason. Even in the best of times business is not easy. Conditions change constantly. Procuring materials and supplies, finding the right people to keep you moving forward, changing customer tastes, changing market and economic conditions are all part of the day-to-day. The ever more global marketplace of competition makes any business a wild ride. So even in the best of times it is important to continuously strive to improve your organization so that you can either remain in front of the pack or gain ground to move to the front.

Continuous improvement means looking at everything you do and making it better. The hard part for many organizations, though, is to see what you’re looking at. On the surface, many things you do, your processes, might look like they’re just fine and don’t need any improvement. Other processes might not even need a close view to know they need improvement. But how many times have you seen something that needs to be improved, but it just never gets done? Kaizen means seeing what you’re looking at, looking below the surface of some processes, and getting off your bum and fixing the things that you’ve been putting off.

Kaizen isn’t so much a technique, but a mindset. It’s a way of thinking where you never accept that the way you do things is good enough, they can always be done better. Your processes can always be more effective and more efficient. Efficient means using fewer resources to get the same result or using the same amount of resources to get more done. Resources include time, people, materials, equipment, space, whatever it is you use to get the job done. Effective means that you accomplish your goals. And each process has a goal.

Your organization as a whole has goals, or you should have clearly defined goals. Every process, a process simply being a series of tasks to do a job, should also have a clearly defined goal. Have you ever had a job where you performed some task and always wondered why you did it? You knew it wasn’t necessary or could have been done much better, but you had to do it anyway? That’s because no one ever defined, or questioned, the goal of that process and how it supported the larger process or the goals of the organization. I’ve experienced this first hand a number of times. It’s common with reports. At some time, for some reason, someone wanted a report, and it might even have been useful at the time. But over time the report had become unnecessary, but nobody wanted to stop generating it. On more than one occasion I’ve stopped generating and distributing reports that were unnecessary – and no one even noticed! That process was not only in need of improvement, it was in need of elimination. If you look, I’ll bet you can find many processes that fit this same criteria. And it’s not always something as innocuous as a report. Sometimes there are steps in a manufacturing process that can and should be eliminated.

More often, though, a step or series of steps must be performed, but they can be done much differently than they are now. They can be done in a different way that takes less time, fewer people, less materials or space, and less money. But you have to look, and you have to see. Look at everything you do. Do three people really need to approve that? Do you really have to write that down AND enter it into the computer? Do you really have to enter that manually, can’t it be done automatically? Do you really need to send a (signed) purchase order to your vendor, can’t you just send them an electronic signal (after you’ve set up an agreement on terms such as quantity for re-orders, price, etc.)?

The point is, examine everything you do, be sure you know why you’re doing it, and find a way to do it better. Every improvement doesn’t have to be a big breakthrough. Small, incremental improvements add up quickly. Better small improvement than none at all.

I’ll continue this thread in future posts.

Hard Times Offer Chance To Improve

The headline reads "Hard times offer chance to improve through IT". The article is well written and I agree with most of it, but I have to disagree on a couple of key points. This article is in the Sunday (December 6, 2009) edition of the Honolulu Star Bulletin, written my John Agsalud.

The article starts off with a very important, and very true, point, "...it's that this is a good time for organizations to innovate and improve their business processes,..." John is right, this is the best time for organizations to make improvements. It's not only the best time, it is absolutely vital for many organizations if they are going to continue to survive. In good times, waste inevitably creeps into every organization. You're doing well, things are moving fast, you don't have time to worry about the little things. But all those little things add up over time, and even in the best of times it is important for organizations to continuously improve their Operations and drive the waste out of the system. In these tough economic times you can't afford to wait to make the improvements, you have to do it now.

The end of the above quoted sentence is where I have my disagreement; "...improve their business processes, usually through the use of technology."

The proper use of technology is very important to the Operations of an organization, and Mr. Agsalud points out many of the benefits in his article. My disagreement is that you do not always need technology, and oftentimes shouldn't use it, to make improvements to your Operations and your business processes.

There are many improvements that can be made without investing in technology. Many times simply examining the flow or steps of a process can reveal surprising insights that lead to simple changes that result in great improvements. Too many organizations (and I've seen some of them personally) immediately jump to a technology "fix" to their problems without ever even analyzing the causes of the problems in the first place. Find out what is causing you to be less than excellent, or what is causing you to perform lower than you want or expect, then craft a solution. You can decide at this point whether the solution includes the use of technology or not.

Technology has a high cost, in time, money, and other resources. You have to make sure you approach a technology implementation as an investment, and you have to be very clear on what the return on that investment will be. You also have to be very clear on what the actual and total investment is before you begin.

Use technology when appropriate. Use it to improve your organization. Just don't use it as a crutch and expect technology to help you when it's not the lack of technology that is causing your problems now.

Preaching to the Choir

I was speaking with a colleague the other day and we were talking about our business and the current tough economy, how it's effecting businesses, and how we can help. Basically we were ranting, or "preaching to the choir" (each other).

In these tough economic times organizations have to operate as efficiently and effectively as possible. Their performance has to be exceptional. But my argument is that this is how organizations should operate at all times. Sure, in this kind of economic environment there are some actions that have to be taken that wouldn't be considered in normal times, even in tough normal times. But for the most part, organizations should always be examining how they do things (their processes) and working to make things work better. To me this means working towards defined goals. Develop a plan with defined goals for the organization, develop an action plan that will get you to those goals, and develop a performance measurement system that ties everything that everyone does to those goals. I call this Goal Attainment.

This should be done in the best of times, but it is imperative that it be done now. You can't afford not to.

Innovation: What it means for you

I’m reading a group of articles in Inc. magazine about innovation. Apparently there are a fair number of consulting companies that specialize in innovation. I’m not sure how that works. Hire somebody to be creative for you, or something, I guess. Nothing wrong with that. As I say, do what you’re good at and outsource the things you’re not good at. That applies to creativity and innovation too. But that’s not what I find interesting in the articles.

What struck me is one article in particular, about how these innovation companies keep their employees thinking creatively and innovatively. I work a lot in the area of process improvement, and I advocate creativity during process improvement activities. I also advocate taking care of your employees and fostering a work environment where employees want to be, not just someplace they go just to get a paycheck. It turns out that the same things that these innovation companies do to keep their employees thinking creatively and innovatively are the same things you should do to keep your employees engaged and creative in their everyday work and in process improvement activities.

I tell people that if your employees aren’t making mistakes, you’re doing something wrong. Because if you’re not making mistakes, you’re not trying anything new. If you’re not trying anything new, you’re doing the same old things. You can’t expect different results if you’re doing the same old things, and you certainly can’t grow, improve, and become more successful and profitable.

You won’t be able to do all the things that these innovation companies do for their employees, but you can do many of them. You can, and should, encourage your employees to try new things and allow them to make mistakes. One of the innovation companies even presents an award to the employee who made the biggest or best mistake, which means they give an award for failure. If you punish failure, no one will ever try anything new. If you reward it, people will try all sorts of grand new things. You don’t want people making the same mistakes over and over, of course. I’m talking about trying new things in the context of making improvements to processes, products, and service offerings. Try it, and reap the rewards.

Great marketing doesn’t make a great company

You can’t argue that Starbucks is an impressive company. From a small local coffee shop in Seattle to a global behemoth, they’ve changed the coffee experience for a whole generation. Long a tradition in Europe, the gourmet coffee shop culture hit the U.S. not too long ago (OK, I can’t remember when it hit big time, but it wasn’t that long ago). There have been coffee shops around for quite awhile, and there’s always been the quintessential (I like to throw big words in every once in awhile so you think I’m smart) American diner with diner coffee, but the explosion of the coffee culture is a recent phenomenon here. And Starbucks is the undisputed leader.

But what is Starbucks, really. In my opinion (to save me from any legal issues, this is my OPINION), Starbucks can’t make a decent cup of coffee to save their lives. And don’t get me started on their, so called, espresso, my drink of choice. But given that, they sure are successful. In some places you can’t spit without hitting a Starbucks. The cartoons kidding about opening a Starbucks in a Starbucks is not far off the mark it seems. So they’re successful, but at what.

To me, Starbucks is a marketing company. They’ve introduced coffee (one choice, extra dark and bitter) to the masses. They’ve raised coffee from a commodity to a premium product. They’ve pioneered the concept of cannibalizing sales of an existing store to raise total sales. You’ve seen it, they’ll put a store right across the street from an existing store, which takes sales from the existing store, but increases overall sales by attracting customers who wouldn’t go to that existing store for one reason or another (traffic patterns, parking, laziness, etc.). Genius.

But great marketing doesn’t make a great company. They’re processes are broken, or were never designed well in the first place. As I said, I’m an espresso man (and for the best espresso I’ve had, the gold standard, head over to The Steps of Rome caffé in San Francisco). Now espresso should never touch paper. It’s a ceramic cup, demitasse, or nothing (well, unless you’re in an airport where you take what you can get). So I order a “double espresso for here”. That concept is beyond many of the new employees, the “for here” thing. I guess they often skip over that part in Starbucks school (less than stellar training process). Then the fun begins.

They’re set up to move people through as quick as possible. Depending on the time of day and how busy it is, the number of employees waiting on customers varies. But usually, one person takes the order and takes your money. They grab a cup and write the codes on it for whatever you’re ordering. These are paper and plastic cups. To go. Not for here. So that’s what they’re set up for. To get an espresso for here they have to write the code on a small sticky, about the size of a band-aid (can I say that, or do I have to say Band-Aid brand adhesive bandage?). So the person making the drinks is used to grabbing the coded cups, not the coded sticky. So the sticky frequently goes unnoticed or lost in the shuffle. This is not good from the customer’s perspective (me). I end up waiting. I usually stand right up at the counter so they see me and wonder why I’ve been standing there so long. Sometimes I ask if they’re making my espresso. Sometimes the person who took my order notices me standing there with my thumb up my butt, waiting. Standing there like a dissatisfied customer. But, hey, I’m just a guy with a $2 espresso, not a $5 mocha lotta quadruple pump soy half foam chunk ‘o licious fru fru whatever. Then today, just to throw me over the edge, they give me a single espresso instead of the double I ordered and paid for. They even handed me the single espresso while saying “here’s your double espresso”. Poor service makes me cranky. Broken processes make me cranky. It doesn’t have to be that way.

Of course, I say this as I sit in Starbucks yet again. I wrote my first book here and I’m writing my next book here, so obviously it has some appeal. The greatest appeal is its proximity to my house. The fact that they have numerous outlets to plug into is another appeal, as is the general coffee shop culture, and the constant buzz of activity that helps me work. I find I concentrate better when there’s activity and some noise around, it helps me focus. I can’t be the only one who works better this way, because there are a lot of people who come here to work. I’ve seen the same people here for years. The students come and go, but some of them camp out here for a couple of years at a time.

So I’m not bashing Starbucks, I just think they have some improvement to do. Better to do it now, when you’re at the top of the heap, then when the competition gets tougher and you have to fight for customers. Fix your process, make better espresso, and offer different roasts of coffee.

And just what makes a great organization? Delighted customers. Customers who are happy, satisfied, get exactly what they want, and sometimes things they didn’t even know they wanted. Effective processes. Processes that work towards achieving the organization’s strategic objectives. Processes that have defined goals, are efficient in achieving those goals, do not waste time, effort, or money in achieving those goals. Processes that are clear and understandable, and are measurable. Organizations that stand out above the crowd with their internal practices, how they treat their employees and how they go about achieving their goals. And organizations that give back to the community, locally, and globally if they are able. Organizations that treat their customers and their non-customers alike with respect and dignity.

I’m done now.