Aug 29, 2011 | Innovation, Operations
Global sourcing, whilst offering benefits to customers in the county doing the outsourcing, has the long term effect of reducing the relative innovative capacity of the “outsourcer.”
As innovators seek the lowest cost for the product of their innovative output, the location of that resulting manufacturing acquires the capability to improve on the original from the proximity of daily interaction with the production, so are in a better position than the original innovator to build on the knowledge emerging from operational implementation.
What do you think the chances are that the next iteration of mobile technology will come from Chinese subcontractors to Apple? Following the example of chip manufacturing, formerly located in the US where the development was located, and now concentrated in Taiwan, I would think pretty good!
In the Australian food industry, manufacturing has been gutted, significantly driven by the twin impacts of the power of the retailers, and high Australian dollar making packaged goods imports cheaper.
We all understand sustainable innovation is the lifeblood of industry, and are increasingly understanding that sustainable innovation also requires the proximity of the manufacturing operations to the R&D and commercialisation activities that feed the process. That virtuous circle has been broken in the Australian food industry, amongst others, and I despair that it is so far gone that there will be no coming back, no matter how much the SME sector points out the obvious to the wallies who make the short term decisions with such dire long term impacts.
Jul 26, 2011 | Leadership, Management, Operations
Completing an AAR, (After Action Review) is now widely practiced, effectively a commercial post mortem after any major commercial activity. Completing an AAR has been standard practice for a long time after a capital expenditure, generally called something else, but it embodies the notion of learning from the mistakes, and successes to build capability the next time.
How much better it would be to conduct a formal pre mortem?
Project yourself into the future, a year, 2 years, whatever is appropriate, and assume the project you are considering has gone pear shaped, then conceive of all the ways in which this may have happened, and what the better option may have been. In other words, conduct a “Pre Mortem”
It seems to me that a rigorous pre mortem may be a pretty useful way of avoiding mistakes in the first place, better than having to learn from them.
Jun 20, 2011 | Communication, Marketing, Operations
Experience is hard won, experienced people have an intuition built up over time that is not always obvious, and is certainly not a “by the list” analysis of all the factors, weighing up the relative importance of each, and reaching a conclusion. Somehow it is a cognitive process that happens really quickly.
Some years ago my daughter had an accident in a gym, and very badly broke her arm, to the point of being almost severed. Whilst it was treated as an emergency, and substantial resources immediately swung into action, 24 hours later it was an experienced nursing sister, someone with many years orthopedic trauma experience who noticed a couple of very minor inconsistencies, and demanded a specialist review. That saved my daughters arm from gangrene setting is as a result of Carriage Syndrome. When I asked her how she recognised it, when nobody else had, all she could say was that she “just did”. Experience. She knew enough through experience, had seen enough cases in the past with all the nuances that occur, to recognise cognitively what was going on, rather than just knowing what to do to apparently address the all the apparent problems of a severe compound fracture.
Psychologist Gary Klein has made a lifetime study of decision making, describing the impact of experience on decision making, and how it works in situations of stress, ambiguity, and time critical situations.
Considering the value of this experience should shake some of the corporations around who hire 30 year olds rather than 50 year olds, (and 60 year olds) because of a perceived “vim and vigor” benefit, but what about the instinct and intuition built of long experience? Experience covers all aspects of life, the positive impact of experience influenced decision making is just more obvious in some situations than others. Experience enables those who have it to instinctively see what is going on, rather than just responding to the more obvious what to do.
Jun 16, 2011 | Lean, Operations, Strategy
One of the reasons it is sometimes hard to keep a lean initiative alive, or indeed, get it past first base after the initial adrenalin has worn off is the manner in which the traditional accounting systems monitor performance. Often, accounting is the hardest function to win across, because their whole rationale is brought to account, if I may use such a bad pun.
Lets just consider a few of the more common things accounting does to (unintentionally) frustrate lean:
- Counts inventory as an asset, encouraging a build up of inventory, at best, not discouraging it
- Fails to monitor capacity, so simple improvements such as reducing downtime, reducing changeover time, speeding up throughput, do not get counted until a full bill of materials review is done, and often not then. Therefore, good work is not seen on the bottom line.
- Fails to monitor the performance, other than direct cost ,of individual steps in a value stream to understand the impact one may have on the whole value stream.
- Rarely is there a full value stream costing done, including sales and marketing costs, Accounting simply do not have the tools in their kitbags.
- Customer value is a foreign concept to accounting, “marketing takes care of that” (“by the way, what is it?”) making it easy to ignore anything outside the ledger
- Fails to understand that lean builds capacity, and the benefits start to flow only when the freed up capacity is utilised
- Fails to recognise that value streams are cross functional, and rarely fit comfortably into the common functional responsibilities and performance measures that are applied.
So, perhaps task No.1 in a Lean initiative is to get the “beenies” on board and thinking about how the impact of the initiative can be counted, made transparent, communicated, and improved upon.
Jun 5, 2011 | Collaboration, Leadership, Operations
Consider, what the people on the production line are thinking about right now, finishing work, the fishing trip on the weekend, the necessity to get the car fixed and registered by next Monday, how can they pay that huge electricity bill, the game last night?
Think how much more productive it would be if they were thinking about how to do the job better, quicker, with less rejects, less risk of injury, to tighter more consistent specs?
And then consider weather or not it is a failure of the management culture that they are not doing so?
Googles 20% time, the famous 3M time, works for them, why not for everyone?
It is not easy to engage employees in this way, very few are able to do it, which is exactly why it is worth doing, as it delivers a huge advantage.
May 24, 2011 | Collaboration, Lean, Operations
The lean tool, 5s, is often a starting point for lean implementation. It makes sense, as on the surface, it is relatively easy, “straighten, sweep, set, standardise, and sustain”, but it is this last bit that catches people out.
A clean, tidy workplace with everything in its marked place is great, a good start, but in itself, it is a bit like having your 15 year old son clean his room, looks nice, but doesn’t necessarily convert him from computer games to his poetry homework.
A lean implementation is hard, detailed, collaborative work requiring time, commitment and leadership, if it is to make an impact on work flow, changeover times, preventive maintanence programs, inventory management, safety, and all the other things that go to make up a lean workplace. Unfortunately, it cannot be sufficiently simplified to make any PowerPoint presentation any more than a superficial representation, an awareness builder.
So next time someone pulls out a slick presentation designed to part you from your money, consider the real work that needs to be done, and dismiss the hyperbole for what it is, hyperbole. You need to be prepared to knuckle down to some hard work to get anything useful and sustainable done, or just leave it all alone, save yourself some money and sweat, and just continue to bumble along.
