But you, and your business, can only win the race to your vision when in each effort you repeatedly Finish Strong.

Ask yourself, what other technology advances are we using to copy our previous methods rather than actually improve our business? That describes many ERP implementations, and many other “software solutions.”

Technology is not a solution.  It is an enabler.  People still have to think.

To understand why globalization will continue to change, but is certainly not dead, one must only consider why it occurred in the first place.

The actual document says “reframe our summer internship and training program to a diversity internship and training program in which all participants will be students or recent graduates of color.”

A company committed to being the best, to being operationally and financially excellent, cannot afford to exclude any viable candidates.

As with most decisions, there are options, variables, and the probabilities of occurrence and severity of any specific risk coming to fruition. In business and in life, it is rare that “throw caution to the wind” is a valid path forward. But also in both, “do nothing” is rarely a valid path forward.

I decided to fly.

But they didn’t list employees, suppliers or customers!  What does that mean for them, and for you?

Now the speed of technology advances, collectively referred to as Industry 4.0, is drowning many in the manufacturing industry. While large manufacturers are studying, testing and implementing numerous new capabilities, many small manufacturers continue to struggle with their ERP system. Will technology kill the small manufacturer?

His most famous, Sagrada Familia, is not yet complete.  Gaudi died in 1926, over 40 years after taking over this huge religious project in 1883. When asked repeatedly why construction was taking so long, Gaudi famously replied “my client is not in a hurry.” At his death, it was less than 25% complete.

Numerous world-famous architects and stone masons have become involved in the project, some investing the vast majority of their careers. Now, still about a decade from completion, millions of visitors come to see the outside and the inside as construction continues. No one leaves disappointed.

Gaudi’s vision has been respected but slightly altered by subsequent chief architects. That is to be expected. Antoni Gaudi did everything in his power to make this religious building fulfill his vision for it. But models were destroyed by war and burnt by fire, and funding inadequate at times. Others have taken the mantle, literally, and intertwined their insights. That makes the building no less valid, but in fact more representative of evolving thinking.

Now consider your business’s journey of excellence.  Are you frustrated that it’s taking so long?  Are you concerned that someone may alter the plans when you leave?  Is every change to your vision a negative?

I hope not. Your vision and your understanding of what is possible evolve. Momentum can ebb and flow. What you once thought sacrosanct you may now realize can have many flavors.  I have certainly gained that understanding over time. My own journey is accelerating. My critical and analytical thinking skills, vision, and application creativity all continue to develop, so my journey too is not a straight line. Nor should it be.

Let’s all learn from Gaudi that patience in creating our vision, and trusting the good intentions of others, may be never ending.  But a journey well worth the time and energy required. The important aspect is a beautiful vision worth realizing.

Most streets are one way, with only very large ones bidirectional.  The large streets have one lane side-roads on each side.  These are used by taxis, delivery trucks, scooters and bikes, and on rare occasion cars preparing to turn on an approaching intersection. They also have broad walkways between the access and major road.  There people walk, sit on benches, enjoy the greenery, and peacefully share with the well marked bicycle paths.

Choreography is king. Choreography supported by obvious visual systems is amazingly effective.

And for you manufacturers?  Those monument pieces of equipment are difficult and expensive to move once put in place.  Plan carefully. Smaller ones can and should be located where they best support product quality and flow. Parts delivery and presentation and people and product movement can all be improved.  This city provides ideas to those who can envision free flowing product where the system makes everything obvious.

Could those who can’t dance see and follow the choreography you have designed? You can save time and money and improve safety when the answer is a solid yes.

Comment below if you have specific questions or ideas.

Rebecca shares a plan to follow.

Executive Summary:  We can’t prepare for every eventuality and we shouldn’t.  But there are inexpensive and simple methods to be reasonably prepared.  First, consider these normal sources of business risk: Customers,Suppliers,Employees,Product and materials, Competitors,Evil intent of others, Bad luck, and of course, Lousy Leadership. In most of these categories, you can identify the likely risk categories quickly.  As a minimum, you can set simple metrics or processes to assess status. A bank that’s not prepared to handle a robbery is incompetent. Manufacturers can prioritize risks based on likelihood and define prevention, recognition and mitigation plans. These quick risk management steps are inexpensive and simple to execute. It’s unethical and lousy leadership that escorts a company totally unprepared for likely risks.

Executive Summary: Do you have very simple tests for distinguishing those you want to work with from those more trouble than they’re worth? Next, ignorance is not a bad thing, unless we try to hide it. I don’t need to pretend I know everything. Neither do you. False omniscience is expensive.  ..who makes the most isn’t a big deal.  What is a big deal is who brings the most value. The biggest lesson running through all these examples is that simplicity is more effective than complexity.  Each of these examples demonstrate a straight forward approach. No effort to complicate.

Executive Summary:  A well-planned supplier conference can strengthen the supply chain, prevent significant problems, and reduce time-to-market for more than one participant.  The first step in planning an effective supplier conference is a clear statement of its purpose.Next, the host should invite those suppliers most impacted by the primary topic, or with the greatest ability to impact it.  You may be surprised to learn that there’s no need to invite all suppliers for the entire conference.  For those suppliers integral to accomplishing the purpose, invite their employees best able to contribute during the meeting, not those who can convey messages later. Please share your experiences with effective supplier conferences so we can all learn

Executive Summary:  First, it’s easy to resort to the obligatory metrics. Don’t waste money reporting metrics just because the company down the street uses it, even if it sounds good in a conference room. Next, we all too often waste time and money collecting data that is too untimely or inaccurate to improve decision-making.  Lastly, we often track metrics that do not provide clear interpretation.Here are 3 ways to measure the effectiveness of your metrics, and ensure the ones you end up with help you run your business better: (1) You can list one or more decision that you will make, based on the value or direction of the metric. (2) You won’t make a related decision without reviewing it first. (3) The value of improved decision-making outweighs the costs of reporting the metric.

The keep trying part is easy: stories of great results and desperation to try almost anything to become more competitive. It’s the “almost” part that causes the collapse.

Let’s start with the most visible causes of failure. The technical ones. Lean is a thinking system that includes tools, not a system of tools. When leadership doesn’t understand this basic fact, there’s a low ceiling on improvement.

Slapping tools on a factory without specific just-in-time purpose that matters to employees, and on top of whatever is already in place, won’t work. Yet, it’s a common form of “lean implementation.” That effort is typically led by someone who fails to realize that Toyota designed tools to meet its needs, not anyone else’s, and that tools are a means to an end and not an end. Copy-paste isn’t a good approach, especially when you don’t understand what you’re copying.

A second cause of lean disintegration is managerial. Lean is unlikely to fit well into current management systems, yet management rarely thinks its processes need to change. When conversation is about “who” and a culture of blame instead of on process, lean is absent. Additionally, problem solving can require new skills and time to get to root cause. The same managers that fail to provide that support are the ones expressing frustration at repeat problems. Band-Aids make a simple system complex and do not drive problems from the business.

The third source of lean failures is philosophical. When people are viewed as an expense, there will be trouble. When the numbers are more important than learning, there will be trouble. When leadership says “we want to do lean” instead of “we want to become lean” it rarely understands the pervasive nature of organizational change required.

While I have seen all these causes of lean failures, one of the most common factors limiting success is the philosophical wall of “the company is the owner’s asset.” While legally true, that perception limits the commitment of every other stakeholder. This usually appears as lean is at risk when management changes.

So why does lean fail so often?

Because it’s not nearly as simple as it seems. Successful lean implementations require significant and pervasive change throughout most organizations with constant reinforcement of the behavioral adjustments. It is not a silver bullet, nor is it quick. Like weight control and smoking cessation, people start with good intentions. Some make immediate and noticeable changes. But its much more difficult to make the changes stick for life.

I encourage you to look at every slippage in your conversion to becoming lean as an opportunity to learn and grow. Slow progress is still progress. It’s only failure if you quit learning and return to what you were comfortable with before all this started.

I recently said those words, with a touch of humor and a heavy dose of sincerity, to Chad Barr, founder of Cleveland’s Chad Barr Group.  About a year ago Chad and I agreed to work together to create and leverage my digital empire.  His team has helped me create videos, podcasts, process visuals, and present a website that facilitates a visitor’s search of my site to find whatever information they may want. Chad is exceptionally good at pulling coherent thinking from the jumble of ideas circulating in my brain when I’ve been unable to do it myself.

In a recent conversation, we were discussing how to move forward on a few key issues.  My response to Chad was “Of course.  After all, it’s all about you.”  We shared a laugh and moved on.

Sometimes it is all about your supply chain partner.  Sometimes it is all about you. If it’s always about one or the other, the relationship will not work over time.  When a supplier tells you they will be late with an order, unless it truly is the end of the world, don’t act like it is.  Work together to develop a solution, or if the delay doesn’t harm you, thank the supplier for the advance notice.

Just because you have separate P&Ls doesn’t mean your mutual best interests can’t be easily found.

Yet in 2015, the rains have fallen.  In one month the great state of Texas received enough rain to cover the entire state with 8 inches of water.  Unfortunately, it didn’t fall quite that evenly.  Floods have killed people and washed away valuable top soil in some parts, while others continue to look to the skies, hoping for clouds.

Increasing inventories in response to an outage has that same unproductive result.  In fact, is there a problem?  Did you target 100% on-time/complete?  No, you didn’t.  Even a 99% target service level means a few shortages will occur, and few companies aim that high.

Raising inventories costs money, takes space, and increases chances for errors and obsolescence.  It rarely does anything to improve service levels.  Yes, a strategic review of demand and supply patterns and resultant adjustments to inventory can be valuable.  Just like seeing a dry patch of dirt and pouring water on it doesn’t make lasting improvements, increasing inventory in response to a shortage is knee-jerk.

Like this year’s rains, it seems like a good idea at the time, but it destroys as much as it saves.

Everything in moderation.  And with analysis and strategy.

Just because things seem to be running smoothly doesn’t mean we can take our foot off the pedal.  The belief that vaccinations are no longer needed represents the same faulty thinking as operations managers who think it’s okay to shift attention away from daily management of excellence.

Measles was eliminated from the United States because children were vaccinated.  It was not eradicated from the world. Similarly, daily improvement happens in operations because management focuses on it every day.

An adult can quickly see if a child has contracted measles, but then it’s too late to prevent it.  An operations manager may not notice the slide away from daily management until very hard work to re-institute that culture is required.

Keep vaccinations current so the greater population isn’t threatened.  Keep daily management of operational excellence in place out of respect for the people who want to be great.

Did he suddenly become a bad coach?  Did the other teams suddenly have better coaching?

As Harbaugh now chooses to move back to the college ranks, one sports commentator said “his shtick works better with young guys who are gone after three or four years.”

That may or may not be true, but sometimes players (employees) need to hear a new voice.  What causes that?  Not every coach (executive) has to leave after a few short years because their players (employees) would no longer listen.  But some do.

Most of us know someone who reminds us of the cartoon talk bubble of Charlie Brown’s mother or teacher:  “blah, blah, blah….”  We hear, but don’t listen.

Leaders work to avoid that.  They want people to truly listen and act accordingly.

Some in leadership positions, Jim Harbaugh as one example, simply say the same thing over and over and lose the attention of the audience.

Is your team actually listening to you?

Shtick gets a short term reaction.  Repeated enough, it gets boring.

True vision communicated in a way that interests the audience is not shtick, but leadership.

The consistency of message never gets boring. It’s not motivational, but purposeful.  It is useful in providing guidance.

Your employees need clear vision and priorities, not motivation or entertainment, from you.  If your leadership message is shtick, I encourage you to consciously change that today.  If you notice eyes starting to glaze over, it’s shtick — regardless of how much you think it’s not.

Pope Francis also said “”a church that doesn’t try to improve is like a sick body.”

Replace “church” with “organization” and the frustration remains accurate for businesses.  And for not-for-profits.  And for government agencies.

Look at leadership behaviors in your organization.  Could you make the same observations about yours as did the Pope about his?

I love leadership in action.  So do followers. If you want your company to succeed, be willing to admit to weaknesses and do something about addressing them.

]]>

The judicial system has since declared Rice immediately eligible to return to professional football, but teams are expected to shy away from the public relations nightmare that signing him would entail.

Not one of us would condone knocking another person unconscious without “just cause.” Most are offended because such a physically fit man hit a woman so hard, and would be less upset had Rice hit a man.

While righteous indignation in this public case is easy, does your company have a termination policy if an employee is charged with hitting someone outside of work? Are you concerned about the image of your company should an employee commit a similar crime?

In Ohio people convicted of a DUI (driving under the influence) are given bright yellow license plates with red numbers that must be affixed to their cars while they have limited driving privileges. While I am amazed by how many of those plates I see on the road, I am equally amazed with how many sit in the parking lots of manufacturing companies.  Apparently the off-work poor decision-making of those employees is not enough to get them fired, much less enough to prevent them from working in their profession ever again.

While there are many arguments for second chances and the hiring of felons that have “paid their debt to society,” becoming aware of extremely poor decision-making by employees seems to require some kind of evaluation process by the employer.

Ray Rice not only gave a black eye to his now-wife; he gave one to the entire NFL. Strangely, that same league employees a significant number of convicted criminals without all the fanfare.

Does your company have a consistent policy that applies to all equally, or do you even want one?  Maybe “does it make the front page?” defines the split between forgivable and fired.  That seems to be the case in the NFL.

By now, most manufacturers are aware of the tools of Lean and if not, can get introductory training from junior colleges, adult education courses, online, or from entry-level consultants/trainers.  Truly understanding the when and why and how of lean tools is a different story, requiring an in-depth understanding of the concepts.  See my September 11, 2014 blog posting 5S:  A Process for Your Business for an example.

The focus of the vast majority of the 1700+ conference attendees was on developing Lean Leaders, the Leader Standard Work component of a Lean Management System, Manage for Daily Improvement and creating lean culture from the top.  See my October 6, 2014 posting Lean Management System for a great visual as well as solid information on that process.

If you are interested in seeing the conference presentations, download the conference app; the presentation PPTs are attached to the Value Stream presentation descriptions.  If you are interested in understanding the concepts well, reach out to someone who does.

Unfortunately, a small manufacturer planning such a move is likely running low on cash.  Moving expenses, preparing inventory to support customers during a multi-day shutdown of production, and purchase or lease costs add up in a hurry.  Hiring an engineering firm with software to test various layouts and the resultant people and material flow challenges may be out of reach.

If it is, all is not lost.  I have helped more than one client company evaluate alternative layouts using what I call “paper doll cutouts.”  By that, I mean use grid paper for proportion and floor scheme.  Be sure to note supporting posts, I-beams and any other “unusable floor space.” Also note access to electrical, water, and other utilities that are important to your process. Then cut out scale paper representations of each piece of equipment (with access area for maintenance noted) and each required inventory location.  Be sure to label every piece of paper clearly.

Now you can try various layouts.  Place the equipment and inventory “dolls” where you think they should be.  Then discuss with your team people and inventory flow, enough space to move comfortably but not so much that time and money are wasted.  Three feet might sound like a wide aisle, but especially if surrounded by tall equipment, it is not. Walking 10 feet from one machine to another doesn’t sound like much, unless you are asking someone to do it 100 times per day.

Once you think you’ve got it, and presuming the new building is empty before you move in, it is time to create large cardboard cutouts of equipment and inventory storage areas.  Referring to your small grid plan, put these in place on the floor.  Invariably something  looks different that expected.

Once you have finalized your new layout, mark the floor to clearly indicate exactly where equipment goes and which direction it is facing.  The move can be completed much more quickly with this clarity.

While fancy software can evaluate more options more quickly and with more detail, even it is likely to overlook something that you won’t see until the move is complete. While “paper doll cutouts” may not sound very manufacturing-like, the process is easily understood, flexible, and effective.

Don’t miss this chance to favorably impact costs for years to come.

The fatal failures appear most probable in high humidity environments, although can occur anywhere.  What does that tell us about the Takata product testing component of the company’s New Product Development (NPD) process?

With no inside information, the facts suggest insufficient environmental testing.  Given that passenger vehicles are used from the icy temps of Greenland and Alaska to the heat of Texas and Okinawa, effective NPD testing should obviously include extreme temperatures for extended periods.

Given that a majority of the world’s population lives along coastlines, it seems intuitive that extensive humidity testing is equally required.  If that was done by Takata it was unreliable.

With the known advantages of getting to market first, imagine the pressure on product testing engineers.  No one wants to test for 10,000 elapsed hours (over 400 days) so how to best verify assertions of product durability with extensive use?  The engineers are expected to generate simulations that are fast and sufficient to verify claims.

Clearly the Takata process was insufficient.  Global airbag competitors smell blood (figuratively) and are moving quickly to replace Takata at the six major car manufacturers impacted.  This problem could be the death knell for Takata.

Are you certain that the product testing component of your New Product Development process is sufficiently robust?  Is that a fact, or merely a hope?  Speed to market is exceptionally important, but not at the cost of speed to destruction.

Executives have limited time, but they are expected to support every effort. Rebecca explains five elements of effective executive support.

The same is true of the worldwide competition that manufacturers face.  It never sleeps.  Whether your competitors are simply in additional time zones, or are large companies that operate 24/7/365, when you go home they are still working to unseat you from your best customers.

Terror, fear, and anxiety may be logical under the circumstances but are hardly useful.  But the realization that what used to be good enough is no longer, and understanding that current performance will underwhelm in the near future are both important to getting a good night’s sleep.

The best companies, and those that survived the last major downturn certainly are doing something right, are truly committed to “every one, every day” as they focus on increasing value to the market.  They know strong leadership that shows the way forward with consistency and fortitude will stay ahead of the lesser competitors nibbling at their heels.

If you are one of those lesser competitors, you must learn to survive on the crumbs left by others.  If you are one with strong leadership and effective never-ending commitment to excellence, rest well.

The competition may never sleep, but you can.  And rested, tomorrow you will lead your team to even greater accomplishments.

Most manufacturing is very safe (sure a handful of exceptions exist, because some owners are irresponsible. That’s true in every industry).  People continue to want “things” and “things” must be made.  It’s a question of where and how.  Companies are realizing that chasing cheap labor is foolish.

Most importantly, young people should know that the vast majority of manufacturing roles require intelligence, math and computer skills, and are very rewarding.  Like playing video games?  Try running a million dollar piece of equipment.  Think coding is cool?  Try writing programs to make precision parts on a 6-axis machine. Want some control over your work?  Good companies expect employees to suggest how to improve the work, and then participate in implementing those ideas.  Want to leave your brain at the door?  Manufacturing is NOT for you.

Think it’s a male environment?  This female has invested her entire career in it.  There’s room for anyone with good critical thinking skills.

If you have interest in learning more, October 3, 2014 is Manufacturing Day in the United States, and is being celebrated through the end of October.  Some companies are hosting open houses, others have posted videos.  See what manufacturing means now!

To host or attend an event, check out www.mfgday.com.  Make your future!

John Crawford was recently killed by police in a WalMart store as he carried a toy gun sold by the store!  Why someone called police is a topic of conjecture, but suffice it to say that even had he been carrying a fully loaded AK-47 Crawford would not have been violating the law.  There was no problem that needed to be solved.

The definition of a problem is when “what should be happening” (WSBH) is not equal to “what is happening” (WIH). Apparently someone thought Mr. Crawford should not have been carrying what could be mistaken for a real gun, believed there was a problem and asked police to solve it.  Unfortunately the perceived problem was based on opinion rather than data and the corrective action was deadly and wrong.

Open carry complicates the assessment of “WSBH” in public.  Regrettably a majority of manufacturers internally house equally confusing visual systems.  In some manufacturers death can result.  In most, it’s just bad decisions.

Are your visual systems indubitable?  If inside knowledge is required to properly interpret them, or they are subject to opinion, they are insufficient for their purpose.

Prevent critical decisions in your business from going horribly awry.  Ensure WSBH and WIH are simple, obvious, and observable.  Clarity is essential to success.  And in some cases, to life.

Rebecca explains that processes don’t always work the way they should. Blaming the people might be the last thing you should do.

That’s partially true, but inherent in the statement are several important assumptions. For your key metrics, ask these questions:

1)        Does the employee being measured believe he can in fact directly impact the metric as much or more than can others who are measured by something else?

• The example of insisting Distribution minimize shipping costs while Supply Chain minimizes inventory costs is but one that can create conflict among departmental leaders

2)        Is the metric defined sufficiently well to consistently respond to the behaviors you want?

• If product mix, or seasonality, or other similar factors are acceptable explanations for the metric going in the wrong direction, then it’s not a good metric. You’re saying it’s okay to behave in a way that makes the metric deteriorate, which means it is not driving behavior and you don’t want it to!

3)        And perhaps most importantly, does top management focus constantly on understanding the values and movement of key metrics?

• No matter what leaders say, it’s what leaders do that actually drives behaviors of others in the organization.
• If “key metrics” are mentioned at the beginning of the year and then again at performance review time and not in the interim, the metrics are useless in running the business.

Metrics come in two kinds.

1) Those that drive the behaviors you believe are critical to your organizations success, and

2) Those that are perhaps interesting, but irrelevant.

Eliminate all of those in category 2 and focus on a mere handful of those in category 1. Your business will benefit.

In testimony the IRS has admitted that they keep data backups for limited periods and that individual email storage is under 500 mg. Also known as one YouTube cat video.

Now think about what you expect from your employees and how your individual behavior supports or denigrates those expectations.

Just as our internal management reporting systems should not be focused on the needs of the IRS, our management style should not emulate the IRS.

But by small changes to materials, processing, or marketing, a commodity can become distinct and earn a higher price.

Example: today I wanted to buy low sodium tomato sauce. There were 3 brands and 2 container types that all said ‘no salt added’ on the front. Had I not read the labels carefully I would have purchased either the cheapest or the brand I know best.

But the details showed that the actual quantity of sodium per comparable serving varied widely. I bought the one with the lowest sodium content. But only because I took the time to figure out there was a real difference.

Clearly consumers of this ‘no salt added’ product care about sodium content, but may not suspect distinctions among them.

A label noting the extremely and relatively low salt level could increase sales simply by making it easier to know. Perhaps minor process or ingredient changes could reduce sodium levels to the point of ‘no sodium’ labeling, which could further differentiate.

Know where your offering can be easily differentiated in ways the customer cares about. If it can pay for itself, make the change.

Otherwise you’re leaving your future to chance.

Do the citizens of Greater Atlanta want to pay for snow removal equipment and manpower for the 2-3 years they are not needed so that they are available for the few hours they could be helpful? I doubt it. Just as people who complain about utility prices don’t want to pay for excess capacity the 360 days per year that it is not needed to keep them cool.

Some flights are over booked; others fly with empty seats. Some hotels are overbooked; others have unused rooms. If a storm threatens, grocery stores run out of milk and bread; more often, a percentage of perishable products go unsold as they reach the “best by” date.

We are logical people. We want what we want when we want it at a price we want to pay. Unfortunately, few forms of capacity are inexpensively variable. So we get stranded, we get hot and food spoils, we fear starvation from a storm. Our logic all too often fails to see the inescapable logic of this cycle.

I feel badly for children and the elderly stranded in Atlanta, as their health and safety were at risk. But for the rest of you, consider it an adventure that saved you money the rest of the year and get on with your lives.

In some products, labor is a major portion of costs. It seems much easier to move operations to a country with labor rates that are 50% lower than to double productivity where you are. But that Silver Bullet quick fix brings its own set of problems with it. The one least recognized is that the impetus to improve productivity is reduced, and with it, the commitment to operational excellence.

In other products, labor is a minor portion of costs. It doesn’t make sense to locate those operations based on labor rates, yet some companies try anyway.

If you look at a Profit & Loss (P&L) statement, you will find many items under the expense category in addition to labor. The challenge is that labor seems to be the easiest to impact. Just get rid of some people or pay them less. Voila! Labor costs are down.

But good leadership understands that low labor rates are not the Holy Grail. There’s no need to move all over the world chasing one line item on the P&L. Good leadership understands customer service, delivery lead times, total costs of ownership, and other items not specifically listed on the P&L but that are crucial to the one number that matters: The bottom one.

In many businesses, the cell phone is a valid tool for doing one’s job. Those companies generally don’t have a policy limiting personal cell phone use, as it would be impossible to enforce.

In others, particularly in service industries interacting with the public, the cell phone is a customer service nightmare. Certainly a chunk of those have “allowed only during official breaks” rules, and another chunk forbids them entirely. I certainly don’t know the answer, but I know one unintended consequence I wish businesses would consider.

The ladies room. A limited number of stalls, even in larger businesses. In my experience, which I readily admit is NOT a statistical sample, an incredible percentage of the time at least one stall is taken by an employee sneaking in a phone call and some social media. Their visits aren’t short and the appropriate etiquette for others in the room isn’t clearly defined. I almost feel guilty flushing due to the noise it creates for the rogue employee!

Please service industry leaders! Add more stalls or provide a different place for your employees to handle their personal business while at work!

Every manage in every business should think about the unintended consequences of policies before implementation.

PS: I will rely on the caring and experience of a man to inform you whether or not the problem impacts the mens room.

But almost 75% of large companies interviewed earlier this year said they HAD BEEN IMPACTED BY A SUPPLY CHAIN DISRUPTION SO SIGNIFICANT IT REQUIRED TOP LEVEL MANAGEMENT INVOLVEMENT. I hate all caps as much as the next guy, but I want to get your attention.

IT CAN HAPPEN TO YOU!

Your suppliers, power source, roads, operations, servers and other key resources CAN be interrupted no matter how well you plan. The questions, as with most things, is how you respond.

Have you tested your IT off-site backup and recovery systems to ensure you can be back up and operating electronically within an hour? Have you verified your backup plans for every key supplier becoming incapacitated on short notice? Can your access to credit immediately provide what is required to get you going again? Can you reach all employees, suppliers and customers to let them know what is happening and how to react?

If you have verified backup plans, there’s no need for a doomsday cloud hanging overhead. At least you are prepared for the worst. But if you don’t have verified plans, your should know it can happen to you. After all, it’s happened to 75% of large companies, and you’re likely no luckier than they.

Download the findings of the AQPC survey referenced here: http://blogs.hbr.org/2013/07/research-why-companies-get-blindsided/

But two aspects of “outsourcing” that common travel-related vendors have accomplished really unnerve me. First, and this one is just a pet peeve, is that hotel cleaning staffs seem unable, unwilling, or untrained to make sure all the light bulbs works in a room before considering their job done.

The second, and this one jeopardizes our safety, is that car rental companies fill your return with gas, run it through the wash and consider it ready to hit the road again. No verification of tire pressures, fuel levels, or that the spare is actually in the trunk. And heaven forbid that they clean the inside of the windshield or change the wiper blades! It’s been months since a car I’ve rented (regardless of agency) has been fully functional.

When I responded to the rote question “was every thing alright with the car?” with “no, there was no windshield wiper fluid” or some other observation, only on one occasion did some obvious action occur. A car rental employee marked something on the drivers window in what appeared to be chalk. I’m hoping that was a message about the problem, and not an inside joke about whining customers.

I don’t mind that most of my suppliers have outsourced much of our administrative relationship to me but I am concerned that the auto rental agencies have outsourced my safety to the customer just before me. I’m sure he’s a nice guy, but what if he’s given up reporting problems the same way I have? Or what if he reported a problem but the car was simply filled with fuel, washed, and given to me?

The recent discovery of massive shale oil supplies in Australia adds an interesting twist. Australia is our friend. Surely they wouldn’t mind sharing with the US at favorable prices. And, heck, there’s hardly anyone in that huge country so environmental impact shouldn’t even enter the conversation, right?

In Ireland and Scotland we are paying the equivalent of $9/gallon while in the US we complain mightily about $3.50 plus. In Europe hotels the room card is used to activate power to the room, with everything automatically turned off when you take your card and leave the room.

In the US we seem to think the answer to energy dependence is ever-increasing supplies. Demand reduction or control is a ‘tree hugger’ wacko idea.

Looking through history every country (including the Holy See) that has been the undisputed dominant society has lost that role because of excess and unwarranted belief in everlasting success. They’ve each been wrong.

There are plenty of energy-producing materials (including the sun) to last a long time. But since we’re not so willing to share it with future generations, what makes us think Australia will share a drop with us? And why should they? We behave totally uninterested in managing our demand, simply arguing about the best ways to increase supply.

Travel is educational, even for the educated and well-traveled among us. Who knew that driving South to North in Ireland would involve currency and language changes? I should have, but didn’t. The change in measurement systems is most critical when reading speed limit signs! Love the country, but the people even more.

Ireland played a key role in the Industrial Revolution. Despite the recent world-wide recession that hit Ireland as hard as the rest of us, the country continues to add strength in manufacturing operations.

Leave your comfort zone and get out to see how others do it. There’s certainly a few that do it better than you. The belief that “we do it well enough” is just as wrong as “Irish are drunkards” and just as limiting.

Don’t let false rumors get in the way of wonderfully successful visits, introductions to brilliant folks who may do it a bit differently than you, and to your own successful future.

A stereotype is just that, and a lie is just that. The truth is yours to discover.

Not all growth is good. Profitable growth compatible with the business strategy for long term success is one thing; growth resulting from price-cutting, serendipity, and desperation is another. Similarly, not all delivery is good. Heroic effort of expediting is hardly the right way to serve customers on a regular basis.

Avis(R) used to claim “we try harder.” They would have had faster more profitable growth if they could have simply anticipated customer needs and had processes in place to effectively deliver them.

If your organization depends on heroes, you’re in trouble. If your growth is haphazard, you’re in trouble.

Grow and Deliver, but do both smartly.

The behavior is really about risk aversion. People in the rear of the plane are concerned that they will not find open space near their seats so they (logically to the risk averse) place their luggage above seats in front. Of course this decision doesn’t impact how much luggage will fit on the plane; only where it is stored, and how much is stored inconveniently.

If we are so clueless in public, are we equally void of common sense when making decisions at work? Do we worry only about our own selfish and short-sighted interest without considering the impact on the “team?” Do we avoid imagined risks?

What policies akin to baggage fees has management implemented that impact decision-making that leads to less optimal results?

This seems a logical requirement for all law enforcement officers, but sadly, that’s not the case. Fear of union complaints from the non-supervisory level apparently outweighs fear of suspects and criminals escaping. No fitness test required there. Ergo, the donut stereotype continues with plenty of evidence to support it.

Why do manufacturers often promote their best engineer into supervision without providing some “fit for duty” test of supervisory skills? Or perhaps some supervisory training prior to a test? By losing a good engineer to the role of poor supervisor, the company and the engineer both lose twice.

Cuyahoga County sheriff officers can eat donuts by the dozen without career repercussions, unless they want promoted. You can ensure that your engineers are led by people who are fit for duty by helping them prepare and then verifying the appropriate skill set exists. And the same for your accountants, your supply chain professionals and all your other teams.

While requiring that the county sheriff officers are fit for duty may be just crazy, there’s no reason why all of us can’t work to ensure that leadership is qualified.

We all know about the shortage of key manufacturing skills in the US. That scarceness extends beyond manufacturing as well. The same companies that removed tens of thousands from their payrolls just a few short years ago are now making counteroffers to key people who choose to resign. That “supply and demand” thing is amazing!

A good company ensures its employees are treated well with respect, pay, benefits, responsibilities and all the other components of what makes a job a good one or a bad one. If your employee will leave today for more money, he will do so tomorrow as well. Matching or beating a competing offer only delays the inevitable with that employee and speaks volumes to those who didn’t resign.

Provide an environment that attracts and retains good people. If a good person chooses to leave, wish them well. And make sure you’re treating fairly all those that didn’t leave.

Like lemmings, many manufacturers are now rushing from off-shoring to near-shore and re-shore, only to find much of domestic capacity gone.

Those who outsourced to LCCs frequently discovered that such a decision based on labor content overlooked the numerous costs of inventory and lead-time that irregular or low demand for those items entailed. They have also discovered that many decisions, once made, are difficult to unmake.

As additive manufacturing processes change the options for your supply chain, as advances in material sciences increase alternatives exponentially, as a garage-based innovator brings his genius to market, whatever formula you are using today is incomplete. Just as the formula that emphasized labor costs was wrong. Just as high school counselors telling students that manufacturing is dead was short-sighted.

PLEASE think strategically!

As we were all told as kids, just because everyone else does it doesn’t mean it’s the right thing for you to do. That doesn’t mean jumping off a building isn’t fun; just make sure there’s a trampoline or a nice mattress below, not a pile of dead lemmings.

Unfortunately, over the past 20 years, manufacturing in the US experienced plummeting employment and experience leaving the industry for work elsewhere. Finding the kinds of experienced and skilled labor we need now is difficult.

You better get good at hiring for character and learning ability and fast, effective training.

If you aren’t aware of it, check out TWI (Training Within Industry) as a means to support the training and development side. Become familiar with Coaching Kata and Improvement Kata if you want constant improvement.

Your company will need to be as good at learning as it must be at attracting, selecting, and developing good people.

“Watch what consumers do and where they do it more than what they say” advises degreed economist and manufacturing operations strategist Rebecca Morgan, President of Fulcrum ConsultingWorks, Inc. in Cleveland Ohio. “Recent surveys report that consumer confidence is weak yet spending patterns demonstrate the opposite. “

Morgan continues, “The important question is how and when does consumer confidence impact your business? Evidence suggests that consumers are now freely spending on what they see as non-luxuries, and those with good credit are dipping a toe in luxury (to them) purchases as well. But those baby steps don’t mean 40-foot boat sales are about to skyrocket. Those “financing-based luxury providers” should watch credit ratios and availability more than consumer confidence in the months ahead.”

The doormen that help rotate the revolving door, the white-gloved dark-skinned female elevator operators that save guests the trouble of pushing the floor button, the handsome young men in tails at the registration desk are all part of the ambience.

Unfortunately, so is the concierge recommended sports bar that is really a French bistro, the dirty plate of half-eaten fruit left in my room, the bar servers incapable of splitting a check 50/50 between a credit card and a room charge, and the housekeeper ringing the doorbell of my room at 10:30 the first night and 9:30 the second to see if I wanted ice.

Operations can quickly waste all the money invested in marketing an image.

Manufacturers don’t want to kill someone to entice employees and visitors to take safety seriously, but it seems something has to be done to garner and maintain attention.

I’ve met many machinists missing parts or all of fingers. Typically they are the most experienced, who believe they can reach in and back out before the equipment takes action. These are ‘the frequent flyers’ of their industries. The other ‘injury-prone’ subgroup I see are the young tough guys who believe in their own immortality.

High schools often stage badly wrecked vehicles on the lawn to dissuade wreckless and drunken driving at Prom or graduation.

Maybe manufacturers should put the lost appendages of injured employers in a glass jar of formaldehyde by the time clock.

Sounds gross but tell that to those who died off the coast of Italy. Bad things that hurt us are not always created by us. Others can do stupid things too. Awareness is half the battle.

It’s really as simple as partnering with someone when both can benefit. Most companies would never consider partnering with a competitor, benefit be damned! But that’s a tad short-sighted, don’t you think?

Toyota already has a production facility in Mexico, but it makes trucks. Sure, they could build a plant from the ground up, but Mazda already has a facility and a workforce that is underutilized. By working together, both companies profit.

Toyota worked with GM many years ago in the NUMMI plant in California. That hardly gave GM a competitive advantage, although if they had listened they could have avoided many subsequent problems.

Toyota is successful because it is not afraid to partner with others, even ones that appear on the outside to be strange bedfellows.

The economics of the newspaper industry have changed drastically in the past 10 years. Of the several reasons two stand out: wide access to the internet, and an expectation of instant news better met by other providers.

The economics of the television industry have changed drastically in the past 15 years. Of the several reasons two stand out: the digitization of signal and the alternate distribution models of satellites and cable.

The economics of retail have changed drastically over the past 10 years. Of the several reasons two stand out: new expectations for choice, availability, price, information and fast delivery created by the internet, especially Amazon, and the uninformed service providers in many brick & mortar stores.

The economics of the manufacturing industry are changing right now. China may represent the best known example of differing ethics (aka, respect for copyright and or patents) affecting manufacturers. Digitization is everywhere, which enables the 3D printer to increasingly meet the “I want it and I want it now” aspect of demand. New distribution channels are evolving, impacted by the need for cost reduction and the expectation of immediate supply.

If you assume your industry is immune from these shifts you are wrong. Whether B2B or B2C, your world is morphing into something you haven’t faced before. But there are plenty of examples from which we can learn.

Sam Cooke may not have talking about the economics of the music industry, or of the manufacturing industry, but don’t stick your head in the sand believing “we’re different.” You’re not. As Sam wrote, “this is a mean old world to try and live in…”

One would think this information is in one place within the United database, updated there when things change. So how can such differing information be presented to the customers within 15 feet of each other? Apparently they choose to keep information in multiple places.

Why do I suspect there are more than 2 locations for that information within the United database? Because I’ve received text alerts that differ from either directive described above.

Just exactly from how many gates can one flight on one day at one time leave?

If there’s only One Truth, why do they spread so many false clues?

Texas Republicans actually put language in their platform to PREVENT TEACHING CRITICAL THINKING SKILLS IN SCHOOL! They are concerned that critical thinking skills are what allows young people to not accept everything their parents tell them as absolute fact.

I would much rather support the education that enables landing safely on Mars than the one that convinces people to stand in line (to get food or with boycott signs) over one man’s opinion of the definition of marriage.

Rip woke, wishing to maintain his pre-nap idleness, but knowing things had changed.
GM woke, wishing to maintain its pre-nap strategic and management approaches, but knowing things had changed.

Neither had the commitment to actually make changes in themselves.

Rip’s laziness had no real impact on the surrounding citizens.
Not so lucky, the citizens surrounding GM.

Following the sleepy eyes of Lloyd Carr and the fire and brimstone of Rich Rodriguez, Brady Hoke has players performing. How?

Safety Jordan Kovacs attributes it to Brady’s (1) understanding of the program’s tradition, (2) passion for the program, (3) tone of mutual respect, and (4) re-establishment of a foundation of toughness, accountability, and pride in the program.  Mostly the same players as last year, but with significantly improved results.

If Hoke can apply those simple principles to successfully get a bunch of 19 year old boys to perform at increasing levels of success, perhaps they would help you do the same with your employees.  If Big Blue can do it, surely you can too.

It was interesting to watch the doctors and assistants look for basic supplies as I sat in the “minor surgery” room.  Couldn’t find the right size or right material “thread” for stitching; couldn’t find the right antiseptic; and on it went.  While the medical care I received seems good (will know more when stitches removed later this week), they could work much more effectively with simple visual systems to organize and re-order inventory.

They had a very nice sign on the wall of one of the rooms that said something to the effect: “there is no idle time; organize and clean for the 200 days that are crazy busy.” We discussed that, and they all understood and supported that message.  They simply have no training in how to organize effectively.  Cabinet were labeled with generic description of what was behind; syringe; suture; urology.  But behind those doors was a stacked conglomeration of materials.  Pull out a box, read it, put it back and pull out another.  The process was repeated until they found what they needed or gave up and said they were out. There was no “sharp medical products” disposal container in the surgical room, and a regular trash can was used for all wastes, bloody and otherwise.

A two hour training class summarizing 5S and Mistake Proofing concepts would save this group of hard working medical professionals (and their patients) a lot of time, and likely provide better quality care.

That sounds so painful…

When will journalists and economic pundits figure out that hiring is always a lagging indicator?  And what about all the productivity improvements that smart companies have made during the last 2 years?  They aren’t driven by whips and chains, but by problem solving and better processes.

Increasing productivity is the way that countries become richer, but somehow it’s made to seem like a bad thing.  Don’t be fooled.  Growth without increasing productivity is not the goal.

I applaud the sentement and claimed commitment.  It’s important for companies to stand for something in addition to profits.  But how far should that commitment go?  That company can apparently still make an acceptable profit following its espoused commitment.  But what about the company that cannot? 

Is an EBITDA of 10% too little to justify offshoring?  How about 20%?  At what point is it greed?

I would guess that decision is a function of shareholders understanding of and interest in long term impacts.  On the one extreme, let’s say all US manufacturers offshore 100%.  Clearly that would devastate our economy and also any US sales they were hoping to get.  What if US manufacturers offshore nothing.  If the materials don’t exist here or we can’t make it using domestic resources, then a foreign company will have to export it to the US if we are to have access.  Not as obviously, but without the energy we import, that becomes almost the same as the other extreme.

Until we focus on energy independence, can we really complain about other types of offshoring?

My Dad, who hated his job but couldn’t leave it with 4 hungry kids to support, taught me to never be in the position he was in. Live in a way where you always maintain freedom of choice on everything important to you. With that knowledge, I left the “safety” of traditional employment for the “uncertainty” of running my own business, and have never looked back. For each of us, real security is in our skills, knowledge, work ethic, and respect for others. It is not in the hands of anyone else.

My first clients taught me that I didn’t have to know everything; I only had to be honest with myself about what I did and did not know, and willing to learn about the latter. They helped me understand that client and consultant are a team working for common purpose in a mutually beneficial alliance. Any other relationship between client and consultant is simply wrong. I will never forget that.

Professional associates along the way taught me new ways to think, to interact, and to learn. They’ve helped round out my skill set in ways that continue to benefit both me and my clients. I am a much better person and professional today than I would have been without them.

Every client helped, every plant visited, every workshop and conference attended, every “you ought to know him/her” meeting, and every volunteer role accepted has further developed my vision, awareness, empathy, and listening skills.

Twenty years into this adventure, I thank each of you, while eagerly moving toward the experiences yet to come. I hope your ride is as enjoyable.

Even if you hate sports, take the time to become familiar with the life and thinking of John Wooden. It takes more than luck to achieve all that he did. It takes great leadership.

Just a few elements from his famous “Pyramid of Success” illustrating 12 lessons in leadership:

• Good Values Attract Good People
• Call Yourself a Teacher
• Little Things Make Big Things Happen
• Make Greatness Attainable By All
• Don’t Look At The Scoreboard

If you are familiar with Deming, Shingo, and Ohno, these sound very familiar. The concepts aren’t complex; living them sometimes is. But we can all at least try.

If your company delivers exactly what the customer ordered, when it was wanted, and the invoicing / payment is as promised, you’ve succeeded. Anything else, and you’ve failed.  The customer doesn’t care about your new computer system or who’s out of the office today or any other excuses.

If you can’t get it right every time, then at least build your organization to replace “it’s not my fault” with “I will get it fixed immediately” and then do it!

The EPA has been an exhibitor at the last several AME annual conferences, and distributes “lean” articles and interviews with increasing frequency.  They are proactively helping companies understand opportunities to reduce waste, especially those that involve energy, water. hazardous, or landfill materials.  They can stimulate industry through these efforts.

We tell children that the police are here to help us, yet most adults consider police as consumed with catching someone doing something wrong as with  helping children or ittle old ladies.  The EPA has been similarly considered “big brother” trying to catch us doing something wrong, with no offsetting kind message for kids.  But this is changing.

I’d love to see all government agencies discover ways to help business succeed while serving their mission.  That “government for the people” is a great idea!

I can take my bike to the one remaining Vespa dealership in this area, but doesn’t it seem that if Vespa were truly interested in customer service, I would have found out about this change other than by getting a call from a friend reporting an empty building?  While the folks at the dealership seemed passionate, nice, and interested in service, they couldn’t make it.

Maybe they didn’t understand service after all, and why would anyone spend thousands of dollars with a company that doesn’t understand service?  I did, but I’ll be very hesitant to buy a Vespa again.  Even if the dealership doesn’t understand service, the manufacturer should.

It’s not a question of “if” but of “where.” Manufacturing locations are based on a few considerations, which more and more countries can meet. Water and energy are basic. The technical ability to meet requirements is another fundamental question.  Then strategic choices can be made.

Close to raw materials or to customers is another decision point. Sometimes we get both. Then there’s costs. Labor is a small portion of overall cost in most manufacturing industries, with materials and overhead contributing the rest. Overhead includes government regulations and related external factors as well as company specific issues.

High labor content manufacturing is likely to continue moving to every-evolving low cost countries.  For those industries, cheap labor may be the holy grail.  But for most, cheap labor is not the critical strategic issue.

Any country with sound infrastructure can become competitive.  If the US wants to continue as a major player in manufacturing, it must focus on technology, speed, and reduced overhead and competitive raw material pricing. 

Reducing overhead is not the same as reducing labor, but is equally possible and more productive in the long term.

Commodity prices never like uncertainity and they don’t like bad news either. Get prepared!

And then there are the pros. They not only are committed to continuous improvement of their own game; they continually benchmark themselves against the very best. They know who can drive best, who can putt best, and they know the best at every other aspect of the game. That’s called benchmarking.

Businesses are the same way.

Some figure as long as they keep their nose to the grindstone and turn a reasonable profit, they’re okay. Sounds like a hobby.

Some focus on continuous improvement, making sure they are better today than they were yesterday. Absolutely going the right direction, but with no concept of how they compare to the competition. Sounds like a serious hobby.

And then there are the companies that work to get better than the competition every day. They know the weaknesses that cost them the most, the strengths that help them overcome poor performance in other areas. They can distinguish a “hail mary” success from a repeatable one. They know how they stack up against the competition, and against the very best, piece by piece as well as in total. Sounds like a profession.

Whether you golf, ski, bike, run or garden for fun outside the office, make sure that inside it you run your business like a pro.

Oahu safety forces had areas filled with tourists well prepared and the processes to eliminate loss of life and minimize property damage were executed without a flaw (ignoring the idiot on the surfboard who thought it would be “cool”).

Few organizations have such a well planned and communicated safety plan in case of emergency.  Perhaps they should.  Is your organization well prepared?

Just as quality used to be a competitive advantage but has long been expected performance, on-time delivery is fundamental, not indicative of excellence.

Do you have a repeatable reliable process for staying in tune with the voice of the customer?  Does that system then test that voice against your mission and values?  Do you work with the entire supply chain, both directions, to minimize cost and time while maximizing ability to meet and exceed market needs? Do your suppliers love working with you?  Your customers? Your employees?  Do you effectively capture the knowledge gained through problem solving to leverage it now and in the future?

Any “no’s” to those questions means operational excellence is still a goal for you, not a current reality.  Keep working!

1) Buy inventory and supplies just as you need them, not earlier.  A volume price break sounds good, but takes more cash up front.

2) Use of a credit card to pay regular bills gives you an extra 20 (or so) days before actual cash is required.

3) Taking advantage of discounts for early payment may make financial sense, but hurt cash flow.  Take another look at how and when you decide to pay early to take advantage of discounts.

4) Look at your Accounts Receivable early payment discount policies.  2% Net 20 may make less cash sense than 3% net 5.

5) In a custom products environment, requiring deposits from the customer in advance of purchasing dedicated materials or supplies can help both of you.  Your customers need you to be solvent!

All of these recommendations should be reconsidered whenever the relative near term criticality of cash flow and over all costs changes signficantly.

Buy low, sell high. Supply and demand. Economics 101 explained those simple, but somehow still poorly understood concepts.  The recent (and in many ways still current) worldwide economic crisis is but another example.

Supply and demand.  It is often said that the value of something is whatever someone is willing to pay for it. Not true. That is only the value if it is an amount that the buyer is actually paying for it.  Credit mechanisms have changed “actually paying for it” to “stated willingness to pay for it.”  That distinction creates separation of price and value.  The bigger that gap, the more at risk the market or economy.

We don’t want a barter economy because it is inefficient.  We want an efficient market, so we have created financial instruments to reduce transactional friction.  Speed and acceleration we’re good at.  But we’ve not yet mastered the concepts of brakes, and certainly not of when and how hard to apply them.  Why?  Because individuals benefit from the reduced friction, but it is the public good that requires the brakes.

During the “dot-com” years of late 1990’s and early 2000’s, there was talk of a “new business model” that somehow held that profits weren’t necessary to substantiate value.  Value and price became separated, and boom/bust occurred.  The recent worldwide economic crisis is the same issue on a different scale fueled by a similar thoughts but different tools. 

Think SPC (statistical process control). An economy “in control” will keep the divergence of price and value within a “reasonable” band. The big question is:  how wide should that band be?  Individual self interest encourages a wide band, but public interest requires a tighter band.

A current WSJ article describes the insufficiencies of current economic theories in preventing a recurrance of the recent credit crisis and associated slide along the edge of economic doom. It argues that reliance on econometric models overruled critical thinking.  As they say in health care, treat the patient – not the test result, yet central bankers treated the test results instead of the obviously overheated economy. The difference between price and value was huge; we all knew it.  But when we’re each making money from that gap, it’s hard to create public will to narrow it.

Let’s keep it real. As funding institutions, be they banks, hedge funds, or those offering fancier financial instruments, loosened requirements for purchase (read “financing”), the resultant and intended increase in potential buyers increased demand and led to higher prices. As those same funding sources tighten requirements, they reduce the number of potential buyers, thereby reducing demand and prices.  Housing is just one obvious example of the boom/bust.  But it was price that skyrocketed and plummeted, not value.

The tallest fastest roller coaster is exciting, but don’t complain about the highs and the lows if you choose to ride it.  And don’t forget that you end up right where you started.

In this economy, the CPI is down, reflecting that overall price levels are down.  As a result, contracts tied to the CPI will not enjoy an “inflation adjustment” increase in 2010.  And the uproar about how this harms retirees and workers has already begun.

Huh?

The CPI adjustments were to protect against inflation, not to guarantee rising incomes.  To the degree the CPI is a correct index for protection from inflation, how can anyone claim harm because there will be no automatic raise in 2010?  If prices have not risen, there is no need to protect from inflation.  Expectations have changed from the original purpose.

Whenever purpose is forgotten, expectations stray.  

Reinforce purpose constantly.  Monitor stakeholder expectations.  Otherwise, the predictable drift will cost a fortune in damage control, inefficiencies, and corrective actions.  And possibly in finding a way to meet the expectations that have been allowed to grow.

Anyone with more than 6 months in manufacturing has heard of “economies of scale.” That concept is the basis of large lot sizes, as well as many equipment recommendations and costing decisions.

Not a manufacturer? The concept, perhaps under a different name, likely permeates your business nonetheless. Is work processed through stations / people in batches, or one-at-a-time? If in batches, economies of scale thinking is intertwined with your processes.

The “economies of scale” concept says we will reduce costs by processing large batches to spread out high fixed costs to a larger number of units. But the unrecognized costs of economy of scale thinking can be more significant than any alleged savings. Instead, consider economies of flow.

Any time product (whether in the form of physical product or in paperwork or computer information) sits waiting, lead time is being lengthened and costs are being increased. Faster lead times on existing products/services and reduced time-to-market with new products/services improve cash flow, profits, customer satisfaction and market share. The quality advantages are equally significant.

Ask yourself, why do we process in quantities greater than one?

Your answers give you the list of problems you need to solve to move from economies of scale to economies of flow.