There Are No Silver Bullets

Many manufacturers have dabbled with lean manufacturing, looking for that “silver bullet” to drive out cost, improve productivity, eliminate waste and put the organization on the path to continuous improvement and enterprise excellence.  Yes, many a company has braved that path only to become quickly disillusioned.  Quickly achieved improvements, just as quickly disappeared, once management looked away and became focused on other business issues.  Why weren’t those lean tools able to stick once they had been put in place?

Here are a few examples of some of the most common and basic lean tools and what they attempt to achieve:

Kaizen.  Derived from the Japanese word Kai (change) and Zen (better), it’s a continuous improvement philosophy based on achieving small, continuous, incremental steps in making process better.  Kaizen Blitz or Events, which typically take three to five days, are staged to target and rapidly improve processes or work areas.

Visual Factory.  It creates a visual language to distinguish quickly between normality and abnormality, and illustrates waste in a manner that is obvious to everyone.

5S. A component of the Visual Factory, it stands for sort, stabilize, shine, standardize and sustain, and represents the use of controls that enables immediate recognition to standard and any deviation from it.

Quick Changeover.  It’s the period between the last good piece off one production run and the first good piece off the next run, and provides the opportunity to changeover more often.  Benefits are: smaller batch sizes; lower required inventory; better quality control; waste reduction; greater flexibility; reduced lead time; and on-time delivery.

Value Stream Mapping.  A flow diagram that follows all aspects of a product’s production path from beginning to end, it’s a useful way to show process problems.  The “current state” map details what is occurring today.  The “future state” map is the perfected product and process flow with the waste and non-value added activities removed.

Kanban.  A “pull” system, it reduces overproduction by allowing for the production of exactly what is ordered, when it is ordered and in the quantities ordered.  Kanban requires the integration of people, process and technology to eliminate overproduction and secure the benefits of line inventory and safety stock reductions while building to schedule and to customer requirements.

Well there are essentially two reasons that enterprises go from 0 to 60 and back to 0 in short order. First, they don’t approach the improvement process with a systems thinking, integrated action approach. And two, they don’t make the improvement process part of the business strategy.

If you have ever mapped out the sales and operations process for manufacturers, one of the boxes in the flow chart that stands out is that of inventory.  It is probably the only box in the entire flow chart where management can almost automatically give you a dollar figure.  And so it is not unreasonable that management would focus their improvement efforts against what is arguably one of the most costly and highly visible expense sources.  Diligent efforts at driving out excess inventory typically met with significant success and usually in pretty quick order. The company achieves its objectives and management declares itself lean. Ahh, the magic of lean tools!

But alas the fairy tale ends, with bottle necks in production, or unexpected customer demand, or the launch of a new product that drains production resources, or aggressive competitor initiatives, or poor supplier performance or a myriad of other scenarios that cause current high-value customer orders to be unfulfilled and customer complaints to sky rocket.  The inventory is simply not available and the company is not responsive or flexible enough to respond.  The response the company can muster, build inventories and blame lean tools.

The reason for this outcome is that the company did not look at the organization as an integrated system with many direct and indirect cause-and-effect relationships.  Liken it to your own body.  You may have a sore back but the cause of your back pain may actually be as the result of flat feet and require orthotics as a remedy.  In other words the pain manifests itself in the back but the source of the pain is the feet.  Just like the pain in the company manifests itself in excess inventory but the source of the pain may be in production or planning or supplier relationships. One cannot apply the lean tool targeted only at the pain without taking into account that the organization is an integrated system with many cause-and-effect relationships.  Therefore, a systems thinking, integrated action approach must be employed.

Now as you can already see form the above inventory scenario, improvement can be secured by applying the lean tools. Inventories can be driven down, order-to-cash cycle times reduced and wasteful non-value added activities reduced, all by simply applying the lean tool to the area of pain.  But the improvements may be short lived and the full potential benefit will never be achieved.

And the reason is, the improvement process is not part of the core business strategy.  Only when the improvement process has become an integral part of the business strategy, and has become ingrained in the DNA of the company and its employees will the full potential benefit of the lean improvement process be realized.  Lean tools in-and-of themselves do not create lean cultures with lean leadership.  To achieve the ultimate improvement benefit, lean tools must be linked with a process that benchmarks and transforms culture and leadership practices to create an organization that supports responsive decision making, flexibility and innovation. In other words, tying the lean initiatives to company results and ingraining it in the core business strategy.

Lean tools work, but work as they were intended when applied to manufacturing environments with a systems thinking, integrated action approach and when linked with a transformational process that addresses culture and leadership.

 

Harvey Schiller

hschiller@corporatekinetics.ca

!@#$%^&*! Huh? What Did You Mean?

How hard can it be to say what you mean?  It sounds easy but in fact is quite challenging. Why?

Well first of all, what does “mean” really “mean”? There are at least three meanings: 1. what you mean 2. what the listener thinks you mean and 3. the actual dictionary definition. Good successful communication is getting the alignment between # 1 and # 2 above.  One way to achieve that alignment is to craft and think about the message from your listener’s perspective.  It is up to the speaker to use the language that conveys the message and the meaning that is appropriate to the listener.  The listener shouldn’t have to work so hard to be able to understand the message. 

People however forget about 75% of what they hear before they leave the room in which the discussion takes place.  So “telling” isn’t necessarily the most effective way of getting the message across and clearly “telling” isn’t “teaching”.

The more effective way to get the message across is to lead people to self-discovered conclusions and directions by asking questions.  You can convey meaning more effectively and teach anybody anything by asking the right questions.  After all, when you tell people something all they have to do is listen; when you ask questions, they need to think.  Asking questions let’s you guide the thinking of others and the listener can use the words and jargon meaningful and understandable to them.

That doesn’t mean that every meeting is a series of questions.  What it does mean is that in order to ensure alignment between what you mean and what the listener thinks you mean the speaker should use a mix of “telling” and “asking”.

The mixing of “telling” and “asking” takes more effort but when people figure out something for themselves, it tends to be a lasting and much more rewarding experience.

Harvey Schiller

hschiller@corporatekinetics.ca

A LEADERSHIP FRAMEWORK

Leadership is a process by which a person influences others to accomplish an objective and directs the organization in a way that makes it more cohesive and coherent. Leaders make the organization better and achieve higher goals.

Leaders carry out this process by applying their leadership attributes, such as beliefs, values, ethics, character, knowledge, and skills. Although your position as a manager, supervisor, lead, etc. gives you the authority to accomplish certain tasks and objectives in the organization, this power does not make you a leader…it simply makes you the boss.

Good leaders are made not born. Good leaders are continually working and studying to improve their leadership skills and recognize that it is a never ending process of self-study, education, training, and experience.

Good leaders:

Establish a sense of urgency and purpose by continually challenging processes

- Set higher standards both formally in the planning process and informally in day-to-day interaction
- Increase the amount of performance feedback
- Force more relevant data and honest discussions into management meetings
- Set internal measurements that focus on desired performance improvements
- Speed everything up

Develop and inspire a shared vision, and communicate the vision continually

- Convey a picture of what the future will look like
- Create a roadmap for directing the change effort
- Empower people to create individual initiative
- Use every vehicle possible to constantly communicate the new vision and strategies
- Harness the power of people
- Model the behavior expected of employees

Enable other to act by empowering broad based action

- Remove obstacles
- Change systems or structures that undermine change
- Push down decision making
- Encourage and provide training and skills enhancement

Sustain improvements and new approaches

- Recognize and reward
- Build momentum, build supporter base
- Leverage successes and wins to further changes, bigger change projects
- Reinvigorate the process with new projects and change events
- Sustain new approaches and let sink into culture based on credibility as superior practices
- Encourage people to recognize and admit the validity of new practices

The most important question in regards to leadership – What must I change, if I want them to be different?

Harvey Schiller

hschiller@corporatekinetics.ca

A Vision Statement for Next Generation Enterprises

Successful enterprises will embrace a disciplined systematic approach to the critical result drivers through a lean philosophy and enterprise excellence methodologies focused on people, business practices and technologies, and the integration of these systems to create a structure that supports responsive decision making, flexibility and innovation.

A vision statement for next generation enterprises that embrace a high performance, lean manufacturing philosophy:

A lean, flexible and disciplined organization defined by a set of principles and processes that employs groups of capable and empowered people learning and working together in the production and delivery of products and/or services that consistently exceed customers’ expectations in quality, cost and time.

Lean

Lean does not mean the elimination of jobs, but rather it means the elimination of unnecessary duplication and waste in work processes, engineering and manufacturing.  Anything that adds complexity, cost and time that doesn’t add value for the customer should be labeled as waste and reviewed for elimination.

Flexible

Every organization today espouses the need for flexibility, the ability to take advantage of new information, changing markets and new technologies quickly.  This ability needs to translate into changing processes quickly and efficiently in order to produce a greater variety of products in smaller batches to customized requirements and to launch products faster with consistent quality.  Typically this translates into re-configurable, scalable, cost effective manufacturing processes and facilities to minimize capital investment.

Disciplined

Many organizations see flexibility and disciplined as incongruent, but in actuality, in order to achieve flexibility an organization must become disciplined so that the organization is working or building according to schedule with common methods and procedures that keep processes stable so that the desired results are expected and achieved.

Empowered People Learning and Working Together

Although a cliché, people are the single most important competitive driver in any organization.  It is also the one asset of the organization that we have almost complete control over; who we hire, how we train and motivate, and how we manage the talent pool is readily within our control.  Therefore creating educated, capable motivated workers with substantial independent decision making is vital.

Exceeding Customers Expectations

Customer experience companies through quality, cost and delivery and so it is critical that we are able to not only meet those three dimensions but exceed customers’ requirements by providing products and services that fill more than basic
needs and wants.

“Try” is a Weasel Word

Anyone can “try”.  Anyone can say “I guess”…”maybe”….”perhaps”…. or “hopefully”. These are all weasel words that ask managers to evaluate effort and energy rather than results.  Weasel words enable someone to avoid being accountable or responsible for her/his actions and the consequences that result.

What a manager wants to hear is “I can”….. “I can’t”….. “I will”…. or “I won’t”.  What a manager should expect are clear, unambiguous assurances and commitments.  Anything less leaves a huge gap in accountability and leaves too much in doubt in regards to delivering the desired results. Team members can’t be held accountable if they just “try”, cause after all they put forth the effort, they “tried”, and that’s all you really asked of them and all they committed to.

So if as a manager you are going to demand unambiguous commitments and reliability you can count on, you must, in turn, set and communicate very clear targets and goals, and the process by which they will be attained.  That is not to say that you will not necessarily negotiate the targets and goals because input and buy in to the target setting process is important, but once targets are set and agreed to they become non-negotiable.  At this point whether it be revenue, profit or project completion targets they become a commitment. Of course, we do live in the real world and if there is a substantial change that does put the committed targets in doubt, they can be renegotiated but reset with the same commitment.

The next time someone tells you he/she will “try” to achieve the target, simply ask, “Does that mean you will or you won’t?”

 

 

 

 

Knowledge is NOT power, practice is NOT perfection

Recently my sixteen your old son received his G1, a driver’s learning permit (gulp).  Despite having a fair amount of knowledge about cars and driving, his actual driving performance clearly did not equate to his knowledge.  Stops were a little bit rough, turns a little wide and parking straight between two yellow lines was just not happening.

It dawned on me that knowledge alone is not enough. Knowledge is certainly necessary, even critical. Knowledge is valuable. But no, knowledge alone does not equate to successful performance and therefore, contrary to popular belief, knowledge alone is not power.

Real power, success and change come from knowledge coupled with actual application.  Therefore real power is learning AND application.  To know but not to do, is really not to know at all. The only way you can prove you’ve learned or know something is when your behavior actually demonstrates it. If you don’t apply the knowledge, then no benefit or change happens.  So you’re no better off than someone who didn’t have the learning opportunity.  The essence of knowledge is that, once having it, you’ve got to use it.  You have to apply it!

But how you apply your learning is equally as important to the outcome.  My same sixteen your old son is a AAA hockey player.  Having played hockey for the past ten years, he is very knowledgeable about hockey and the systems. However, knowing about every hockey tip, positioning and shooting technique does not make you a hockey player. I watch him and his teams practice and apply their knowledge, but the successful teams we have been on ensure that the execution and application of the knowledge is perfect. They execute with focus and intensity, they execute with excellence. Knowing that you need to pass in a certain situation, and actually passing is beneficial but only successful if the pass is to the appropriate player and is on that player’s stick.  Vince Lombardi said it best, “Practice does not make perfect. Perfect practice makes perfect”.

The more you show what you know, and do so with perfection, then you inevitably become more valuable, more productive and more confident.

So learning AND perfect application leads to change and success.

THE CUSTOMER RELATIONSHIP BANK

Relationships with customers are based on a series of interactions and you must strive to make each interaction with that customer, exceed that customer’s expectations.  Your goal is to transition customers as people who buy from us, to advocates, people who not only buy from us, but also actively promote and support us to others.

This notion can be captured in the Customer Interaction Formula :

E – E =E

Experience (with you)   -      Expectations (of customer)    =     Evaluation

Think of a buying/selling experience that you have very low expectations. Out of 10, you expect a lowly score of 2.  If however you were to actually have a moderately good, no hassle buying experience, you might score it a 6.  Based on the above formula, 6  – 2  = 4.  Therefore a positive experience with room to improve.

Now think of a buying experience where you have very high expectations. Out of 10, you expect an 8, but you’re actually experience is a disaster with a score of 2.  Based on the above formula, 2 – 8 = -6.  A negative evaluation reflecting the experience.

Let’s expand the “customer relationship bank” beyond the obvious of actual buying customers for the product or services you offer and apply it to your company teams, or even your personal life. After all, everyone you come in contact and interact with is a “customer” in a sense.

Regardless of whether it is team members, family members, associates or even friends, it is about expectations. There is always going to be a high expectation you will consistently “be there” and that you are dependable, accessible, honorable and fair.  Its about earning and keeping trust and support, and there is nothing more valuable than having the trust and support of your team, your family …  everyone with whom you interact.

Think of each interaction as depositing goodwill in a bank.  You build that goodwill bank balance with each positive interaction.  When a slip up occurs, as it inevitably will, then there may be a goodwill withdrawal, but the balance does not have go to zero. Striving for positive interactions provides you with the leverage and integrity when you have to negotiate for a “withdrawal”.

When you are striving to make each relationship interaction positive you are giving more, and when that is recognized by others they will give in return.

Managing People? Be a Gardener

If as a manager you think of yourself as a gardener, then you’ll find that the potential for growth is virtually unlimited.  Because gardeners look for ways to stimulate growth; how to plant seeds of ideas; and how to prune and weed to prevent ideas, motivation and opportunities from being chocked off.

Gardeners don’t make plants grow but what they do is simply create the conditions that are conducive for plants to grow.  Create and maintain those conditions and growth occurs and the workplace thrives.

Stimulate Growth

Gardener -    Provide fertilizer & water

Manager -     Provide training and development

Match to Needs

Gardener -    Selection of plants to match growing conditions, purpose and location of garden

Manager -    Recruit the best fit of employees to match the mission, vision and role

Optimize Conditions

Gardener -      Pull weeds

Manager -       Weed out non-productive attitude & behaviours

Just like a gardener that is inquisitive about the environment and growing conditions, and adjusts accordingly, a manager must be curious and get feedback on the conditions of the workplace, and respond accordingly.  As a manager the best way to understand the workplace and conditions is to tap in to the head, heart and hands of the employees. Those we manage crave to have a say in how we operate in the workplace.

So when we ask employees to help define and shape something, they’ll more likely contribute and actually enhance it. They will have an important sense of empowerment, which leads to an increase in job satisfaction and productivity.  The best way to create the optimal conditions for growth, consensus and build commitment is to require active involvement in shaping roles, goals, actions and initiatives.

Essentially, managers would do well to think like gardeners and create conditions that lead to optimal growth.

It’s Good to be Paranoid

What is the most important characteristic of a successful enterprise? Paranoia. That feeling that someone is sneaking up on you.

A fundamental aspect of succeeding in this intensely competitive world is to constantly maintain awareness to changes of all types and that possibilities exists of new competitors and new threats. One of the fundamental drivers of this is of course, technology. If a new technology holds promise, assume that entrepreneurs or competitors will develop it to a point where it is a credible serious threat. Technology is changing the rules and obliterating traditional supply chains, pricing models and customer loyalty.

But it is not only technology. Competitors are reinventing themselves and creating new ways of doing business. Companies are moving from selling a specialty expertise, one product within a specialty to a generalist, multiple products within a specialty to convergence, products outside of the specialty. They are providing integrated action across people and business practices, supported by technology.

This requires businesses to be paranoid about competitors and keep up with the changing needs of customers. What’s really scary is that it is not enough to only be concerned about current competitors, but with convergence of technologies and innovative application, previously unidentified, new competitors can emerge. For example, once photocopiers went digital, and then added networking, they posed a new serious threat to personal printers and fax machines. Dominant players in one market can be beaten by players from other markets.

Fuel your paranoia with three critical questions:

1. What is our strategy as opposed to those of existing competitors?

Too often we become too embroiled in our situation, our own strategy and do not make the effort or take the time to understand our competitors and their strategy. Not only does this allow us to protect our flanks, but may provide insight into our competitors’ vulnerabilities.

2. Is there anything happening in the external world that could lead a new unidentified competitor to enter our business arena in a new and different way? Whenever we undertake a “strategic management session” with clients and work on SWOT (strengths, weaknesses, opportunities and threats) analysis, it is the opportunities and threats that are most poorly assessed. Why? There is not yet a deep appreciation in organizations as to the fact that the emerging opportunities and the corresponding threats can radically and dramatically impact the company and transform an industry.

3. Could any recent developments make my business obsolete? Too many companies get blindsided. They just don’t see the change coming and that their business model is not sustainable. Companies must constantly earn their markets and customers so they must harness their paranoia to continuously add value in the face of new developments and build loyalty with customers.

In the past, paranoia was viewed negatively; however, today paranoia reflects the reality of business today.

Strategic Purchasing

Strategic this! Strategic that! We now label everything with the catch phrase “strategic”. But one of the most vital initiatives that can be undertaken by manufacturers, very well might be “Strategic Purchasing”.

We constantly hear that manufacturers in North American can’t compete because of labour costs.  Many of our clients claim that the high cost of labour gives overseas companies an unfair advantage, and to some degree they are right. But for many of our clients labor costs represent less than 10% of the total product cost, while raw material costs are in the area of 65-70% of product cost.  The economic environment is very difficult with strong competition and cost conscious customers.  Manufacturers must find ways to become more efficient and to reduce input costs.  Clearly raw material sourcing and purchasing is a huge opportunity.

Strategic purchasing is about:

1. Reviewing key categories, contracts, prices, price history and previous strategic sourcing activity
2. Initiating negotiations with current and other potential suppliers towards improved purchasing costs, terms and conditions
3. Internal and external leveraging of volumes
4. Working with suppliers “to put their best foot forward” to retain or obtain the business
5. Structuring the purchase agreements so that they are easy to monitor and prevent future “margin creep”
6. Tracking progress for “continuous improvement”

What hurdles prevent companies from undertaking strategic purchasing? Incumbent purchasing resources are constrained and focused more on the day-to-day operations rather than on cost reduction.  There simply isn’t the focus.  In addition, the expertise to benchmark, negotiate and source may not exist internally. Therefore, using outside resources for strategic purchasing makes tremendous sense as the sourcing tools and techniques can accelerate timeliness of cost reduction initiatives and increase speed to savings, while providing external benchmarking and leverage.

Self Diagnostic Questions

Does your existing staff spend more time on “replenishment” and “keeping the business running” than they do on “strategic sourcing” and “cost reduction”?

Is the buying done by various internal resources rather than by professional purchasers?

Are you aware of cost reduction opportunities that you do not have the time or resources to act on?

Do you feel that you have not maximized opportunities related to movement in the dollar?

Do you feel that some current suppliers may have become complacent in their dealings with you?

If you answered yes, to one or more than you could benefit from an outside strategic purchasing initiative.