Cost Reduction

My toolshed contains ways to save money. We analyze cost drivers and exploit them to improve the bottom line.

Cost drivers, from Michael Porter’s work, are listed:
Knowledge
o Discretionary Policy
§ Wages
§ Technology
§ Mix
§ Service level
§ Material specifications
§ HR policies

o Learning
§ Plant layout
§ Schedule improvement
§ Labor efficiency
§ Design changes
§ Increased yield
§ Increased utilization
§ Tailoring raw materials
· Relationships

o Linkages
§ Internal
· Optimize
· Coordinate
· Inventory
§ External
· Channels

o Interrelationships
§ Share savings

o Integration
§ Reduce cost
§ Increase market power
· Macro Issues
o Location
o Institutional factors
o Timing (first to market, mover?)
· Volume
o Scale
o Utilization patterns

Asheville Retreats

A view of Asheville, NC in March, 2008. Photo by Bob Michel

"You seldom get what you go after unless you know in advance what you want. Indecision has often given an advantage to the other fellow because he did his thinking beforehand." Maurice Switzer

Deciding what he wants for his business is clearly one of the most important things a leader can do. Often the leader is well served having the input of key constituents on strategic matters. When a leadership team begins to stall, it is time to get clear in everyone's minds what is wanted... what is the goal.

I lead teams through excellent corporate events and retreats in Asheville, NC and other locations. I provide a proven framework to work through today's business problems and emerge with effective action plans that teams have developed and buy into. We also provide meeting facilitation training to develop key employees abilities and help transform their work groups. These trained facilitators generate process improvement profit with the team.

I have a new course on effective meetings... click here to create a new account and check it out!

Shadowboards Matter

Tolli and I visited Alcatraz during our California trip last year. The tour was excellent and provided a look at early 5S principles at work. Normally when we apply workplace organization methods we emphasize the importance of "a place for everything and everything in its place" because of efficiency. At Alcatraz, it was a matter of life and death.




Alcatraz inmates were considered the most dangerous of all prisoners and were held in cells most of the day. The exception was at meal time, when any prisoners who weren't in solitary confinement would eat together. There were prisoners who helped in the kitchen. The challenge for the guards was making sure this was done safely. Shadowboards enabled guards to account for every piece of cutlery.


Here you see an example of a shadowboard used in Alcatraz prison to alert guards when inmates had not returned knives.



It is hard to imagine in today's prisons that tools like these might be available to inmates, but at Alcatraz, they found a way to deal with them effectively, by employing a shadowboard.


While today's workplaces are much safer than the Alcatraz of the past, employing best practices, such as workplace organization -- including shadowboards -- sets apart top performing companies.

Connections

“The person who can combine frames of reference and draw connections between ostensibly unrelated points of view is likely to be the one who makes the creative breakthrough”

Denise Shekerjian quotes





Title: Connections I
Artist: Eve Shpritser

What makes a "simply powerful meeting?" The interconnectedness of our thoughts, abilities, and memories make it possible. The skillful melding of planning and flow result in something new and different, exceptional. This is how process improvement profit is generated.

Patterns of Crises

The direct translation of these Chinese characters, which mean crisis, is "an opportunity riding a dangerous wind." Although crises present opportunities, most crises are unwanted and we feel better off without.

In his book, Will Your Next Business Mistake Be Fatal? Avoiding a Chain of Mistakes that Can Destroy Your Organization, Robert E. Mittelstaedt, Jr. describes a pattern traced back from crises. Mittelstaedt finds that the pattern includes these components (and I quote, from the book):

"- An initial problem, often minor in isolation, that goes uncorrected
- A subsequent problem that compounds the effect of the initial problem
- An inept corrective effect
- Disbelief at the accelerating seriousness of the situation
- Generally, an attempt to hide the truth about what is going on while an attempt is made at remediation
- Sudden recognition that the situation is out of control or “in extremis” (In extremis is a Latin phrase meaning "in the furthest reaches" or "at the point of death".)
- Finally, the ultimate disaster scenario involving significant loss of life, financial resources, or both, and ultimately, the recriminations."

If this pattern seems familiar, it should, because most business problems that become crises follow this pattern. Also, the large crises our governments face can be traced back through the same pattern.

What to do, then, to avoid these crises? Clearly, the chain of escalation must be broken. The first component of the pattern is the initial problem. So many crises start out small, in a manageable scope, yet go unfixed. An effective method of problem detecting and corrective action nips these problems in the bud.

When the initial problem gets past the first wave of defence, an interacting problem often amplifies the first one. Now a real mess is brewing. If corrective action fails here, the next phase in escalation is when those responsible begin hiding the problem or downplaying its significance. This can be done through filtering information as it goes up the chain of command. A boss can work to avoid filtering by having several lines of communication to compare messages and validate what he or she is hearing. When there is a disconnect, one of the sources is either filtering information or out of touch. Regardless, this is when help is needed but somehow doesn't show up.

Next, the crisis erupts in some undeniable way. People ask, "how could this happen?" There is enough blame to go around and lessons are learned and spread throughout the organization, but the key question is, is there a system in place to root out problems in their infancy and solve them completely? If not, be ready for more "opportunities riding dangerous winds."

With years of problem solving and corrective action experience, The Flying Toolshed implements corrective action systems so crises may be avoided all together. We believe creating opportunities for our clients rather than having opportunities thrust upon them.

bob@flyingtoolshed.com

Solving Global Warming Is Like Solving World Hunger?

Image courtesy www.eere.energy.gov/.../fid=65.


In a new article, The Washington Post describes one scientist's view that to stop global warming, we need to go to zero emissions output sooner, not later. The article explains that there are no technological reasons why we can't get to zero emissions now, only political and economic reasons. There are no descriptions of how to implement zero emissions technology globally, only references to the old fossil fuel technology (burning fossil fuels has been around a while), implying that new technology is the answer. So it seems, according to the article, all we need to do is decide to fix the problem and do it. This argument is reminiscent on solving world hunger, as well. We have enough food, we have the technology. All we need is the will to fix these problems. So why don't we?

Let's analyze the global warming problem.



First, the problem: the earth's average temperature is trending upwards causing the climate to change. Figures indicate an average increase in temperature of .76 degrees C in the last 100 years. There are many who dispute this finding, others who would argue its significance. For now, let's accept it and go on to the next step, option finding.



What are options to reduce global warming? Here are some of the ideas found on the Web:

• cut or eliminate greenhouse gas emissions


• plant more trees to absorb the extra carbon dioxide


• pump sea water to the polar areas to add to the ice caps


• carbon sequestration


• issue a substance to absorb infra red radiation


• geoengineering to block or reduce solar radiation

Next step: option selection. Here is where global warming and world hunger share a common action-limiting feature: lack of consensus. Until a group (or community, or global community) arrives at a common understanding of the problem it cannot come to consensus on options, therefore selecting a solution is impossible.

This is a common roadblock in solving group problems. We find it in many businesses and non-profit organizations. Problems requiring cross-functional or group action must be recognized as problems first, defined, then options listed, chosen, and implemented. Lastly, the corrective action's effects must be measured and evaluated to ensure solution. Then the group can go back and find another problem.

Our Simply Powerful MeetingSM methods bring groups along this path quickly and effectively so problem definitions are established and options are developed, hurdling over the roadblocks which hold many global or cross-functional solutions at bay.

Problem Solving Approach Defined

We lead teams through a problem solving approach broken into two phases marked by different thought processes. First is the expansion phase, where problems are identified, a problem statement is created, and options are developed. Divergent thinking is required here. Next is the closure phase, where we select an option or options, action is planned and executed, and results are evaluated. Convergent thinking is required in this phase. To close the loop, the process is then repeated, and in high performing organizations, this is an ongoing cycle.*

Problem finding seems easy, because usually they jump up and bite us. Finding hidden problems is often an overlooked step in problem solving. Take for example a low grade "under the radar" quality problem. Often this problem gets a superficial fix and is forgotten. If after time, this problem becomes a repeated headache for a customer, it escalated to cost business. Finding the problems, therefore, is an overlooked step that can be crucial.

Problem stating is an important defining step. What is the problem and what is it not? Can you state succinctly what the problem really is? Often teams get this wrong and end up working on too broad a scope rather than zeroing in on the exact problem.

Option finding is the last part of the expansion phase, where potential solutions are generated. Here we go for quantity, developing as many creative ways to solve the problem as possible.

Now we switch gears to the convergent thinking with the decision of which options to pursue. This is done using data and experience from the process results. An action plan is developed and executed, and when completed, evaluation is made as to the effectiveness of the solution.

The next step, once that problem is solved, is to find the next problem. And the cycle goes on, and we generate process improvement profit.

We use this approach in solving problems of all kinds and we apply various tools to achieve resolution. We use lean and six-sigma approaches as well as 8-discipline approach. We provide strategic planning to work on longer term problems and develop new markets. We stick with our clients from start to finish, helping to implement solutions if desired. One of the first things we do with new clients is to sit down and discuss their process improvement problem or concern in a free initial consultation. Contact us at 828-505-1695.

*Adapted form Karl Albrecht's Brain Power.

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Imperiled Start Up

"Foolish consistency is the hobgoblin of small minds."
Ralph Waldo Emerson


I was in charge of a new plant start up -- a risky assignment since many launches went badly, and this was my first try at it. My responsibility was to take an empty shell of a building and populate it with machines and people, processes and systems, and generate profit.

This launch depended on implementing some unproven new technology, a red flag. The technology in question was elaborate mechanical tooling which deployed in a CNC machine to cut a precise spherical radius on the ID of a casting. To perform this feat, the CNC equipment loaded the casting, then the tool, in the shape of a cylinder with a slot cut out of the side, was inserted into the casting opening. The tool had an ingenious mechanical device to deploy the cutter from the slot using a spine-like grooved lever. The cutting was done at high speed (turning the tool), and at the end of the cycle, the tool was quickly stopped then the cutter was retracted using spring action, hiding the cutter away in the cylinder again, and the tool was pulled from the casting. Nice Idea!

We got the equipment in and set up. We hired great people. We did a lot of training. All the while, I kept hearing about broken cutters. This was troubling because it was unproven technology and the entire start up depended on success. Not only that, cutters cost over $100 each, so the budget was feeling the pain.

We talked to the experts at the toolmaker. They tried to fix the problem. They kept trying, but to no avail. Finally, after weeks and weeks of trying, it became clear that this start up was in peril.

I ordered autopsies of each broken cutter. We opened up some tools to see what was happening. The engineers were puzzled and befuddled. We were asked to start working on "Plan B," which would cost a lot in capital to retrofit our operation. Then I saw the key.

Each tool that had a broken cutter, when opened up, had several small retracting springs which had toppled in the deceleration. The centrifugal force caused the springs to fall over on their side, laying down and providing no force to retract the cutter.

A big shock-absorber spring, that's what we needed! Once we figured out how to place strong enough spring coaxial with the center line, the decelerating forces were overcome by better engineering. The funny thing was, it took a tremendous effort to convince the inventor of the technology to change it... even though the initial design was failing.

My take-away: be open to new ways of looking at things, especially if we invented something and the old way isn't working. When we invent something we are proud of, great! When improvements to that invention come along, better! Often new ideas come from the most unlikely sources, so have eyes and ears open, and minds prepared to accept the possibility of something better.

Please let me know about a time you saw an inventor learn how to improve their invention from an unlikely source...

For more information on the "imperiled start up": http://www.mmsonline.com/articles/069903.html