Customer Focus Eliminates Waste

Recently, my wife had an experience with supplier that wasn’t focused on us as a customer and it created great waste for the supplier.

The shop was low on a particular candle that we buy from a local handmade supplier.  The product is great and it sells really well.  My wife emailed the owner to order more candles.  In the email, she asked if the owner could send a list of spring related scents as we phase out the holiday related scents, so we could pick out what we think our customers would like.

We didn’t hear from the owner for about a week or more.  Then the owner shows up with the candles we ordered plus three new spring scents.  We didn’t like one of the scents.  We said we wouldn’t take that one and discussed other possibilities to choose from.  A different scent was picked and a few days later the owner returned with the new scent.

When the issue of not responding was brought up to the owner, the reply was they were so concerned that we needed the candles right away that they just made them as quick as possible and brought them over.  My wife explained that we don’t need things immediately, especially after the holidays and if there is ever any question to just ask.

The owner wanted to please us, but didn’t focus on what was truly important to us which is the scent selection.  The owner ended up causing waste of defects/rework (making new candles she hadn’t made), waiting (us waiting longer to get the order filled) and transportation (driving to our store twice).

Have you or your company ever rushed a product or service to market because YOU thought that was what the customer needed and then if failed?  What were you focused on?

If you aren’t sure what your customer needs are…ask.  Be clear and focus on what they need, not what you think they need.

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Lean for Small Businesses

If you have followed my blog for awhile you know that my wife started a hand-poured soap and bath and body business a few years ago.  One of her suppliers sends out a monthly newsletter with different kinds of articles: how to make new products, different recipes and in the most recent newsletter an article on lean for the small business.

Though turning to “lean” operation processes may sound like a complicated undertaking best left to large corporations, small businesses are actually ideally equipped to leverage the advantages of a lean business model.

The author is correct.  Being a small business makes it easier to create change more quickly as long as you are dedicated to it.

There are some good points in the article and some that are not even close.  I know lean is a the en vogue thing to discuss but that doesn’t mean everything is always a good point of view.  Better to have it mentioned and start a discussion though.

Some of the good.

You probably spend a lot of time in a day communicating with your clients, vendors, and staff. But have you ever taken a close look at why you have so many of those conversations? If the topics of your business conversations tend to involve a lot of the same questions, standardizing your operations could present a huge opportunity to save time, and eliminate such redundancies. Take detailed notes of the email and phone conversations

…get creative about how you might develop a standardized system for addressing such recurring issues. If customers tend to email or instant chat with similar questions, develop various email templates that you can send to them in a matter of seconds could prove a real time saver. Better yet, incorporate clear language onto your website that answers the questions so they donʼt even have to contact you.

I am more of the thought about trying to get to the root cause and better incorporate the clear language onto your website.  This is a clear way to help eliminate waste and create more time to serving your customers specific needs.

Dave Kerpin suggests that you can improve the efficiency of every [meeting] (and save 900 hours a year) with a simple shift: Donʼt end the discussion until everyone clearly understands their next steps, and you actually begin your own. Kerpin insists this eliminates the odds that miscommunication and confusion linger (which will only lead to further conversation), and reduces the amount of time youʼll spend trying to fi gure out how you need to move forward.

Dave is talking about getting high agreement on what will be done and how it will be done.  This is one of the core lean principles.  He is right.  It helps reduce confusion and communication that comes later from it so the work can be done more quickly.

Some of the not so good.

To adopt the common principles of lean management known as the 5 sʼs (Sort, Straighten, Sweep, Standardize, and Sustain), start by taking a look at your business routine…

This is a smaller issue in that 5S isn’t really a principle but more of a concept or tool to help highlight quickly when something is abnormal.  The author never mentions this.  Just that it can help “clean up” and organize your routine.

This is the one comment that truly gives me heartburn.  It shows the engrained misunderstanding of economies of scale.

If you find yourself ordering inventory frequently, could you forecast more appropriately, to reduce the frequency and possibly, realize cost savings from placing one larger order?

Oh where to start with this one.  First off, you can’t forecast “more appropriately”.  Overcomplicated MRP systems have shown that repeatedly. If you are a small business and growing this is no way to forecast more appropriately.  Understand your lead times and put in a visual reordering system that will trigger with enough time to get your orders in.  You may need to adjust over time as you grow, but it is more efficient and cost effective.

More importantly, don’t just order in bulk to get savings.  This is not a smart move.  You need to understand what your demand is, how much space you have, how much materials cost and how long the inventory would sit around.  If you order a larger quantity to get the savings but it takes 8 months to go through the inventory, you have tied up your cash so you can use it to grow in another area.  As a small business, cash flow is extremely important.  Another factor is the space you have.  If the material is going to take up a lot of space that you don’t have, it is better to not have it spilling over in your work area.  This is something to consider the long term savings in space and cash availability versus the immediate savings of a one time buy.

It was good to see lean talked about in a different arena besides manufacturing.  The message may not always be perfect but it is better to start the conversation than not have it at all.

Should All Customer Feedback Be Transparent to Others?

Is all customer feedback accurate?  Should all customer feedback be displayed?

My first reaction was absolutely all feedback should be displayed.  This is great transparency and help drive improvement.  If you don’t want negative customer feedback then provide a good experience.

I now have changed my tune a bit.  I do believe that customer feedback should be transparent, even the negative.  What I don’t believe is that all feedback should be displayed because there is some of it that is flat out wrong.

It is one thing to have your business not provide a positive experience and actual events posted about that versus an experience that is just not the case.  This is easier to monitor and see in small businesses.

The ideal state is that no bad experiences happen and a customer never receives bad quality product.  Unfortunately, that is not always the case.  If a customer receives a product they are not happy with the provider should have a chance to correct the situation.

In recent months, I have seen where customers are posting negative comments on small businesses that are flat out lies.  Either talking about the business not working with them to correct a situation when the customer never even contacted the business to correct the situation or describing a defect that is not even physically possible with that product.

Understanding unsatisfied customers is a great thing to help improve your  business.  False information that can damage a business is just wrong.

So when using the customer reviews, you must be cautious with what you read.  Understand all the feedback and try to make an educated decision.  Heck.  Even contact the business and ask questions to help you feel more comfortable.

Owning a Small Business is Very Educational

If you are a regular reader of Beyond Lean,  you may know that my wife has her own small business.  It is just her and I.  She runs the business 24/7 and I help where I can on nights and weekends.

Both of us have learned about a wide range of business aspects over the last couple of years from her small business.  My wife has a background in marketing, but has learned a lot about IT and web design, materials, costing, production of a consistent product, using data to determine what the customers like and a lot more.

I have been working quite a bit with display booth setup and teardown (quick changeovers), preparing raw materials for usage and investment decisions.

When owning and running a small business a person can see everything from end-to-end.  How a packaging decision can affect sales?  How does shelf life of a product have an effect on the quality?  How do certain ingredients react when mixing for production?  Do they cause immediate quality issues?  Do they cause quality issues over time?

In our experience, we have seen how lean thinking can be more natural for a small business.  There is more of a concern about inventory and cash on hand, so there are many decisions that go into building to stock or building to order.  Using visual management to make things easier to see when work needs to be done or not.  I have some examples from my wife’s business that I will post at a later date as well as examples I have posted in the past.

I have learned numerous things from working with my wife in her small business that I carry on to my other job as lessons to apply.

Owning a small business is very hard work.  You have to learn about things that don’t necessarily interest you, but if you want to be successful you have to get it done.  In the end, it can be very rewarding and extremely educational.

Understanding Single Piece Flow

One of the first concepts that pops up when learning about lean is single piece flow.  This is a great concept and should be considered when it is appropriate.  Cooking my french fries might not be the time to use single piece flow, but downloading songs may be.

My wife runs a small business of her own.  She sells products online through her website and Etsy as well as events in our local area.  Selling online and brick-n-mortar poses problems from time to time.  One issue is wanting to provide a wide range of scents for customers, but not having large amounts of inventory on-hand because of the batch process of making the soaps in loaves.

After a year and a half, we think we find a solution to this issue.  Most of her requests for custom scents come through her online sales.  Typically, she has the fragrance available but can’t justify making 8 bars in a batch because the other 7 may sit for a year or longer.  She has found a mold that works very well and is the size she needs that allows her to make one soap at a time.  My wife can now fulfill the requests of her customers and offer more fragrances to her line in her online shop without the expense of carrying a year’s worth of finished product.

What about the live events to sell the inventory?

Good question.  The events are always in the Sept – Dec time frame.  So, if a customer orders a special scent in January, the rest of the finished goods would sit until September at the earliest.  She could have used the raw materials for other products.  The soaps that are high volume sellers and do well at the live events can be made in batches right before the event.  Any finished product that is leftover after the event season can be sold online.

It is a good mix of using single piece flow and batch processing when it best fits the situation.  It is about understanding your business needs and trying to meet those needs.  Not forcing everything to one solution whether if fits or not.

What makes sense for your business?

Blog Carnival Annual Roundup 2012 – My Flexible Pencil

At the end of the year, John Hunter does a great job of facilitating an annual roundup of business and lean blogs at Curious Cat Management.  The roundup is a review of blogs by other bloggers.  This year I have the honor of participating in the Blog Carnival Annual Roundup.

A couple of years ago, I met David Kasprzak through blogging.  David is a professional that has worked in large companies throughout his career and recently finished his MBA.  During this time he started his blog, My Flexible Pencil.

David covers a wide range of topics.  He discusses observations of business he has from being with his family, like how helping his son pick something out for show-n-tell was a lesson in teaching people how to develop answers not directing them towards an answer.

David also blogs around business issues like continuous improvement, project management and behavior & culture.  At the beginning of 2012 David had a long series of blogs about ROWE (Results-Only Work Environment).  The topic spurred great conversation from many in lean and ROWE alike.  David wrote a few blogs on the similarities and differences of ROWE and Lean.  Then wrote his own thoughts after hearing both perspectives.  I think it is worth reading and developing your own opinion on the subject.

I read a lot of blogs and respond when I have time to as many as I can, but My Flexible Pencil has caused me to sit back, think and respond more than any other blog.  My Flexible Pencil is a great read.

Blog Carnival Annual Roundup 2012 – Lean Blitz

At the end of the year, John Hunter does a great job of facilitating an annual roundup of business and lean blogs at Curious Cat Management.  The roundup is a review of blogs by other bloggers.  This year I have the honor of participating in the Blog Carnival Annual Roundup.

A blog that I discovered this year was Lean Blitz written by Chad Walters.  Chad is a student of the Toyota Principles and he does a great job of explaining each principle in a separate blog post.  Each post has an example of the principle that can be seen in everyday life.  If you are not familiar with the Toyota Principles I would suggest checking out Chad’s posts on the all 14 Toyota Principles.

Chad uses his business background to write about lean in business like the overproduction Domino’s Pizza has in their stores with all the pre-built pizza boxes.  He also points out how Domino’s can use standardized work toe fold the boxes in the most efficient way like the worker in the TV advertisement.

Chad also shows how the Toyota Principles can help small businesses in a practical way.

A unique perspective that Chad brings is his experience in working with professional sports teams and organizations.  He does a great job of relating the Toyota Principles to happenings in the sporting world.  The Miami Marlins inability to think long-term in order to achieve their goals is a fantastic post about Toyota Principle #1.

Being a very large St. Louis Cardinals fan, I really enjoyed the post about the filth at Wrigley Field (home of the Chicago Cubs).  Chad uses data sited from studies and then relates it to having a good 5S program in place and using visual management.  The morale increases everyone is happier.  Is this the reason the Cubs can’t win?

Chad talks about other lean concepts such as long lead times and how sporting organizations are losing revenue due to long lead times.  Texas A&M got off to a great start in football this past season and their quarterback, Johnny Manziel played well enough to be in the discussion as a Heisman finalist as the best college football player.  The university had long lead times on the jerseys for Manziel and ended up leaving a lot of cash on the table and fans unhappy when they couldn’t get one.

Chad has created a unique blog at Lean Blitz.  It is a fun and different way to demonstrate lean principles in action in any environment.

Practical Visual Management

I am always on the lookout for good examples of visual management.  I like visual management solutions that are simple and solve a consistent problem especially around quality.

Here is a picture of one from my wife’s small business:

My wife makes natural, hand-poured soaps.  This is a soap pop.  It is part of the kids line of soaps she has.  They are made to look like popsicles and are a great party favor at birthdays (part of a shameless plug for the business).

She wanted to be consistent with the layer from soap-to-soap and batch-to-batch so she drew lines with a sharpie on the outside of the molds.  The mold is semi-transparent so she can see when to stop when she is pouring the soap.  This creates a uniform look that shows here customers she does care about the quality and their experience.

Visual management is a concept that can be used by anyone trying to make a problem visible no matter the size of the company or problem.  Do you have any simple examples of using visual management to solve a problem?

Counting Down the Top 10 Viewed Posts of 2011 – 10 Thru 6

2012 is now in full swing.  Before 2011 is too far in the rear view mirror, I thought I would recap the Top 10 most viewed posts on Beyond Lean for 2011.

New followers of the blog can use this as an opportunity to read posts they might have not seen in the past.  While, long time followers can use this as an opportunity to re-read some of the top viewed posts.

This post will count down the 10th thru 6th most viewed posts of 2011.  Enjoy!

10. Dilbert Leading Transformation (July 2010) – Previous Year Ranked #3 – The Pointy-Haired Boss wants clear responsibilities and employee engagement.

9.   Adding Inventory…A Good Thing? (March 2011) –  Sometimes adding inventory might be the right thing to do based on your business. Take time to understand your business and its needs before deciding.

8.  Making Leader Standard Work Visual (June 2011) – An example of a visual board from a group I worked with.  The board makes the tasks and if they were completed by the managers visual.

7.  Beyond Lean Joins Twitter (February 2011) – Beyond Lean announces the venture out onto Twitter.

6.  Redbox Produced in the U.S. Using Lean (October 2010) – Previous Year Ranked #5 – News article about Redbox manufacturing using Lean to produce the Redbox dispensers close to it’s customers in the U.S.

My next post will count down the Top 5 viewed posts of 2011.

Small Businesses Help Unemployment

Thanksgiving is in the rear view mirror. Now it is time to brace for the Christmas season and the craziness it seems to bring. More people will have jobs over this time of year with stores and companies needing the extra holiday help, but it usually ends up being a quick blip on the radar since the work is short-term help.

It is a time to be grateful that more people are working, but lets remember we as a country have a long way to go in order to turn the unemployment rate around. In general, it won’t be large companies that hire large numbers of people that will turn the unemployment situation around. Most of the large companies have too many people already from years of hiring faster than their growth rate.

The small companies that are getting started and growing are the ones that can really help with changing the unemployment situation in the U.S. or anywhere for that matter. During the holiday season, maybe consider buying gifts and services from smaller companies. It may help spark them to bigger and better growth which can lead to more jobs.

A bunch of little guys can spark the change that is needed.