Blog Archives

No PowerPoint. You’re Unprofessional!

Over the years I have continued to learn how to communicate better.  Through lean I have learned how to communicate more clearly using illustrations and eliminating the “other” information that isn’t necessary to get my story told.

One tool that has helped me communicate more clearly is the A3.  The limited space really focuses me on what is important to talk about.  Understanding waste, and not wanting to duplicate my work I use my A3s in during discussions with groups of people instead of creating a multiple slides in PowerPoint stating the same words.  If I need a drawing to support my discussion, I use a white board or chart pad to draw it out, because the drawings can take time to recreate in PowerPoint.

We are taught the A3 is a communication tool.  Don’t duplicate work.  The story is important and that is what needs to be communicated.

WARNING!!!!!  Know your culture and where you are in your lean journey at all times.

After the first few times of using A3s and chart pads to communicate within my current company, I was pulled aside by a couple of senior leaders and told that I come off as unprofessional and not prepared because I didn’t use PowerPoint.

Having no filter, I asked if it was better to spend three hours working on the issue or three hours putting together PowerPoint?  I also asked how I came off unprepared because I could answer any question they had about the issue?  Aside: you might consider how you are talking with before being that direct.

The point is, the leadership and culture at that time were not ready to be communicated with in that fashion.

If you are in a similar situation, I would recommend using slides as a supplement to the A3.  Yes, it would be overprocessing waste, but it is better then people not listening because of a format issue and having to rework everything.

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Apple Will Fail if Manufacturing is Moved to U.S.?

Last week, I caught a blog Why Apple Has to Manufacture in China.  I read hoping to find some practical reasoning as to why it was critical that Apple manufacture in China.  I read the post twice and I couldn’t find any reason it was critical for Apple to manufacture in China.

The post does say labor cost is not a reason to manufacture in China.

It is not an issue of labor costs. In fact, labor costs play a very small role in the equation — both for Apple and for Timbuk2.

The post compares Apple to Timbuk2, a company that makes custom bags.  Two different business models, Timbuk2’s custom production versus Apple’s mass production.  Here is what the post has to say about this.

Timbuk2 manufactures in the US because it produces custom-made bags, orderable through its handy web site, and customers ordering custom bags cannot wait for weeks for a bag to come from China by boat, while shipping by air is expensive and there would still be some uncertainty due to customs clearance. A very similar logic lies behind fashion retailer Zara’s choice to manufacture in Europe, also an expensive location in terms of labor costs. Of course, Timbuk2 does also produce many bags in China but these are mass-produced, non-customized bags, sold wholesale at a fraction of a price of a custom bag, and they are not time-sensitive.

Apple does not produce custom products and so it does not need to deliver quickly — all of its products are standard and mass-produced; just like the standardized bags for Timbuk2, so there is no reason to stay close to end-customers. Moreover, Apple does not change its assortment often — the new iPhone will probably be for sale for another year or two.

There is no need for mass producers to be close to the end-customer?!  Really?  So it is OK to spend a couple of months to get new phones to the U.S. or pay for air freight (which is quite expensive), if there is a defect in a batch of phones?  Not in any business model I know of.  That delay risks the loss of customers and costs the company more money than is needed because of the big batches that may have to be reworked or thrown out.  Also, when the life-cycle of a product is coming to an end it may cause more phones to be thrown our or discounted because of the large batches.

The post is contradicting itself because it says cheap labor is only a small part of the total cost, but then does not take total cost into consideration when looking at all the freight and inventory and possible obsolescence costs.

So why else is it important for Apple to manufacture in China?

Apple is a huge company and as a New York Times article published in January this year details, its production volumes and often unpredictable engineering changes require manufacturing flexibilities and engineering capabilities on a scale that is simply unavailable in the USA.

Exactly my point about inventory above.  The post goes on…

In China, by contrast, manufacturers can deploy thousands of collocated engineers to introduce needed changes overnight, and large supply of labor allows to ramp up and ramp down capacity quickly. There is simply no factory capable of employing 250,000 workers day and night in the USA, surrounded by flexible and capable suppliers. So the location decision isn’t really about labor costs — it’s about manufacturing risk and where that risk is best managed.

Because Apple has bad processes upstream, it is OK to disrupt the lives of thousands with no regards downstream to fix the problem.  Reminds me of the saying, “A mistake by you, does not necessitate an emergency by me.”  Again, raising the cost to produce.

To summarize:

  • Mass producers don’t need to be near the end-customer
  • Disrespect for people is OK when fixing a problem you created

Apple may be on top of the hill today, but 2-5 years from now they won’t be.  As competitors, like Samsung, close the gap managing cost is going to grow more important. Fixing your processes so engineering changes are not needed overnight and locating close to your end-customer so when you do have an engineering change you don’t have tons of inventory to dispose of is a great way to manage your cost.

 

Definiton of Value – Part 2

A few weeks ago I posted a blog about the definition of value that I use.  James Lawther posted a great comment about that post with some good questions.  I felt the questions were good enough that it warranted a blog post to highlight the questions and give my thoughts in response.

With James’ permission here is the comment he left:

Matt

Not sure I agree

1. It must be something the customer finds valuable and is willing to pay for

(Yes)

2. It must change the form, fit, or function of the product/service

(If it doesn’t why would I pay for it?)

3. It must be done right the first time

(If it wasn’t, why would I be willing to pay for it?)

Am I being a pedant? Don’t I only need one definition? What am I missing?

James

My thoughts on James’ comment are below.

I see all three points as one single definition with three parts that must be met.  I agree with your assessment on points 2 and 3 of “If it doesn’t, why would I pay be willing to pay for it?”

The issue comes up when discussing value added activities during an improvement event or discussion.  Having a stringent definition helps make the discussion less personal and more objective.  Two examples that I run into are inspection and finance (or any support function).

With inspection, I have heard the argument that people will pay to have the product right.  I would disagree but can understand that argument.  With the stringent definition though inspection immediately fails point number 2.  Inspection does not change the form, fit or function of a product or service.  People tend to agree with this and the discussion ends.

When the discussion becomes about someone’s specific job like finance, people can get very defensive.  Again, a support job like finance fails point number 2 and does not change the form, fit or function of the product or service.  People will argue that it is necessary to run a business.  I completely agree with so at this point we start to discuss necessary versus pure waste.

There are things that are necessary like reporting the company’s finances or even transportation but it is still not value added and it should be made very clear.  Waste is stuff that can be completely eliminate like extra motion or rework.

Point three about doing it right the first time is part of the definition because sometimes the rework has been so engrained into a process that people think it is normal.  This helps to reinforce the notion that anything that is being redone is not value added and should be scrutinized.

What are your thoughts?

Flip Conventional Wisdom on Business Process Rework

When applying lean to business processes, one of the most common improvements that has to be made is the elimination of errors in paperwork.  When it comes to design this usually shows itself as someone changing their mind and making changes in the design.  When someone makes changes to the design this is a form of rework.  Anytime rework is added the lead time is lengthened.

Sometimes the redesign is due to change of direction and sometimes it is due to the designer tweaking the design hoping for perfection.  One way to eliminate this waste is to shorten the lead time of the original process before the rework loop is added.  I know this is flipping conventional wisdom upside down.  Conventional wisdom says, eliminate the rework and the lead time will become shorter.  Why not shorten the original process through solid lean practices and waste elimination so that the window for design changes is shorter.  Take away the extra time that gives the designer to fiddle with the product or service.  It also causes the designer to due their due diligence up front to understand what the design must entail.  If the organization is trying to win new business or get a new product to market all the rework could cause the organization to lose the revenue from the new business or product hitting the market.

I’m not saying don’t allow rework for the sake of not allowing rework.  But look at why you have rework.  Is the original process so long that it allows people continue to think and nit-pick every detail?  If so, that may be a good time to look at eliminating waste from the original process.

I worked with a procurement group that had a very long process to go out and get quotes for marketing material.  Because the process was so long, the designers and marketers would come back up to 4 times with changes to the material and then the quoting process would have to start again.  The procurement group shortened their lead time for the quoting process and all of a sudden the marketing and design groups couldn’t come back for multiple changes.  This forced marketing and design to improve their process in order to better understand what markets they wanted to hit up front.

Some times you have to flip conventional wisdom on its ear to see things in a new way.  Even for the lean thinkers.  Our thoughts may be different then conventional wisdom but it is still very standard within our community.  We can’t forget to continue to look at things differently.

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