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COMPETITIVE KNOWLEDGE NEWSLETTER 

Let's get to it:

If your company is struggling with the effects of a tight employment market and increasing competition, don't forget to continuously explore outsourcing as an effective coping strategy. Outsourcing can be an effective way to 
save money on operating costs and reduce worker overload. 

Businesses have traditionally cut costs by outsourcing manufacturing, payroll, accounting, and some marketing activities. Today, you have the opportunity to outsource many other activities. Employee hiring... training...customer service...property management...and computer services. 
Target any activities that aren't classified as core to your business - ones that have little effect on your company's growth and profits.

Our lead article this month is on kaizen (ky'zen). In the competitive environment that we find ourselves today, only businesses that successfully integrate kaizen into their business culture will continue to grow and prosper. Don't miss reading: "KAIZEN BASED LEAN MANUFACTURING - A TENACIOUS FOCUS ON QUICK-HITTING, PROCESS IMPROVEMENTS".

An important long-term objective of your Competitive Knowledge Newsletter (CKN) is to help business teams reach their full performance potential. Make sure your key people get a chance to read the article: "COMMIT FULLY TO YOUR JOB."

We are now offering a 32-hour on-site Pilot Project on Kaizen Based  Manufacturing (KBLM). KBLM provides the foundation for MRP, ERP and lean manufacturing success. Its application methodology has proven to help manufacturing companies achieve linear production, decrease cycle times, 
improve on-time deliveries, improve customer satisfaction and increase productivity. Companies that master the eight-basics of KBLM consistently exceed bottom line expectations.

We suggest that you both print and archive this newsletter for current and future reference. Feel free to make copies and share with colleagues.

This newsletter has reached your desk because we share a common objective -- to help key manufacturing people avoid "burnout" while achieving their full performance potential! 

Enjoy,

Bill Gaw, President
Business Basics, LLC
http://www.BBasicsLLC.com 
760.930.1973 

Competitive Knowledge Newsletter - AUGUST 2002

Featured Articles in This Month's Edition of CKN

I.    Kaizen Based Manufacturing
II.   Commit Fully to Your Job
III.  Benchmarking 
IV. Still True After All These Years
V.  Business Anecdotes and Famous Quotations

Takt Time for Winners

I. KAIZEN BASED MANUFACTURING
   A Tenacious Focus on Quick-Hitting, Process Improvements
   By Bill Gaw, CPIM, CmfgE

Total Customer Satisfaction, Theory of Constraints, Materials Requirement Planning, Enterprise Resource Planning, Just-In-Time, Total Quality Management, Business Process Reengineering and Flow Technology 
are some of the programs that have been launched in industry over the last decade. While some companies implementing these programs have achieved significant advances in quality, speed and costs, most have failed to 
achieve promised results. According to industry gurus, the winners attribute their success to adopting the following management practices:

• Creating a clear vision or strategy
• Real-time management commitment
• A focus on processes rather than results
• Timely management support
• Effective tactical planning
• Ongoing relevant training
• Empowering a qualified program champion
• Team dynamics development
• Monitoring tactical execution
• Implementing a recognition/reward system

We agree with the above list, but we believe that most companies employ most of these management practices in their business. Why is it then that when most companies launch a new quality, production or inventory 
control program it slowly and gradually transcends into just another failed management attempt to improve performance? "New programs never thrive, they just fade away" is the hallmark of such companies and consequently 
they never reach their full growth and profit potentials. 

So if the above list of management practices doesn't really separate the winners from the also-rans - what does? Why are some companies successful at obtaining positive results from such programs while other companies fail? If its not on the above list of management practices - what is it?

A study of successful companies will invariably show that they have developed a culture of gradual, continuous improvement. This culture provides the basis for new program implementation success. The Japanese call it kaizen - a management culture of gradual, continuous improvement. 
We describe it as "a tenacious focus on quick-hitting, process improvements." If you doubt the power of gradual, continuous improvement you need to study the careers of Vince Lombardi and Tiger Woods. Their huge success stories are testimonials to kaizen. Vince Lombardi focused 
his players on the continuous improvement of the execution of basics - that's kaizen! Tiger Woods attributes his success to his relentless quest for a better swing, for higher quality gamesmanship and a daily pursuit of perfection - that's also kaizen!


In business, kaizen focuses on three basics; Workplace Effectiveness, Elimination of Waste and Standardization. As an introduction to kaizen, we have delineated below their most important features:

WORKPLACE EFFECTIVENESS

The 5Ss:

1. Sort - - - - - - - -Separate work-in-process, tools, machinery, products and documentation into necessary and the unnecessary and discard the 
unnecessary.

2. Straighten - - - For easy and fast access when needed, everything has a place and everything is in its place.

3. Scrub - - - - - - Keep machines and working environments clean.

4. Systematize - - Develop routine practices for cleaning and checking.

5. Standardize - - Follow procedures and standardize. Continuously improve processes and reestablish standards. 


ELIMINATION OF WASTE, STRAIN AND DISCREPANCY

A simple checkpoint systems 

1. Manpower
2. Technique
3. Methods
4. Time
5. Facilities
6. Jigs and Fixtures
7. Materials
8. Production Volume
9. Inventory
10. Place
11. Way of thinking

The Five Ws and the One H

Who - Who does it? Who is doing it? Who should be doing it? Who else can do it? Who else should do it? 

What - What to do? What is being done? What should be done? What else can be done? What else should be done?

Where - Where to do it? Where is it done? Where should it be done? Where else can it be done? Where else should it be done?

When - When to do it? When is it done? When should it be done? What other time can it be done? What other time should it be done?

Why - Why does he do it? Why do it? Why do it there? Why do it then? Why do it that way?

How - How to do it? How is it done? How should it be done? Can this method be used in other areas? Is there any other way to do it?

Problem-Solving Tools

1. Pareto diagrams - Used to display the relative importance of all of the problems or conditions in order to: choose the starting point for problem solving, monitor success, or identify the basic cause of a problem.

2. Cause-and-effect diagrams - Used to identify and explore and display the possible causes of a specific problem or cause. 

3. Histograms - Used to discover and display the distribution of data by bar graphing the number of units in each category

4. Control Charts - Used to discover how much variability in a process is due to random variation and how much is due to unique events and/or individual action in order to determine whether a process is in statistical control

5. Scatter diagrams - Used when you need to display what happens to one variable when another variable changes in order to test a theory that the two variables are related.

6. Graphs - There are many kinds of graphs employed depending on the shape desired and the purpose of analysis. Bar graphs compare values via parallel bars, while line graphs are used to illustrate variation over a period of time. Circle graphs indicate the categorical breakdown of values; radar charts assist in the analysis of previously evaluated items

7. Checklists - Used to gather data based on sample observations in order to begin to detect patterns. This is the logical point to start in most problem- solving cycles.

Kaizen calls for use of the full PDCA (Plan, Do, Check, Action) problem- solving cycle. PDCA demands that team members not only identify problem areas but also identify the causes, analyze them, implement and test new 
countermeasures and establish new standards and/or procedures.

STANDARDIZATION 

Objectives

1. Represent the best, easiest and safest way to do a job.
2. Offer the best way to preserve know-how and expertise
3. Provide a way to measure performance
4. Show the relationship between cause and effect.
5. Provide a basis for both maintenance and improvements
6. Provide objectives and indicate training goals
7. Create a basis for audit or diagnosis
8. Provide a means for preventing recurrence of errors and 
minimizing variability


The "If not, why not - 5 Whys" checklist

A. Operator

1. Does he follow standards? 
2. Is his work efficiency acceptable?
3. Is he problem-conscious?
4. Is he responsible? Accountable?
5. Is he qualified? Experienced?
7. Is he assigned to the right job?

B. Machine/Facilities

1. Does it meet production requirements?
2. Does it meet process capabilities?
3. Is the maintenance effective?
4. Is the inspection adequate?
6. Does it meet quality requirements?
7. Does it make any unusual noises?
8. Is the layout effective?

C. Materials

1. Is there excess work-In-process?
2. Is the right material in the right place at the right time?
3. Is there rework and scrap?
4. Is there any wasted materials?
5. Is the handling efficient?
6. Is the work-in-process damaged?
7. Is the layout effective?
8. Is quality standard adequate?

D. Operations Method

1. Are the work standards effective?
2. Are work standards upgraded?
3. Do methods produce a good product?
4. Is it an efficient method?
5. Does the sequence of work create a smooth flow?
6. Is setup time minimized?
7. Are the temperatures and humidity acceptable?
8. Are the lighting and ventilation adequate?
9. Is there adequate contact with the previous and next 
process?

Kaizen keeps you thinking and proactive in your pursuit to improve. Bottom line results come slowly but surely and these incremental gains eventually add up to a significant competitive advantage. The spirit of kaizen can also provide innovative actions that can yield amazing breakthroughs in speed, quality and cost. 

Without kaizen, you and your employer will gradually become complacent and accept the status quo as your business culture. As we see it, the lack of kaizen in a business culture is the primary cause of new program failures and the downfall of many companies. 

For additional information on kaizen, please visit our Website at: http://www.BBasicsLLC.com 

Takt Time for Winners

II. COMMIT FULLY TO YOUR JOB
    By Price Pritchett

Expect your employer to expect more from you. The reason? The marketplace is demanding far more these days from the organization itself.

Clients and customers want much better quality than before. They expect top-notch service, too, or they will take their business to your competitors. Speed is also essential, because people have gotten used to instant everything. Frankly, the only way your organization can even hope to 
compete is to employ high performance people. 

In times past, the most common solution to problems was just to hire more employees. Spend more money. Companies can't afford that approach any more. Instead of simply throwing more people at problems, organizations now throw fewer. They have to do more - faster and better - with less. This calls for highly committed people.

There is no room now for employees who mainly put in their time, going through the motions but giving only halfhearted effort. The people who seemed to keep their jobs merely because they could "fog the mirrors" are goners.

In today's world, career success belongs to the committed. To those who work from the heart...who invest themselves passionately in their jobs...and who recommit quickly when change reshapes their work.

If you find you can't recommit rapidly when the company changes, you probably should quit. Get out of there. Don't waste your energy resisting change, and don't kill precious time sitting on the fence. Either buy in, or be on your way because that's best for both you and your employer.

This is not the same as asking that you be "loyal" to the organization. That would probably strike you as rather hypocritical anyhow, because we've all seen that the world puts hard limits on how loyal an employer can be in return. But urging you to have high job commitment actually serves your best interests, even as it benefits the company.

Strong job commitment makes work far more satisfying. It's therapeutic, too, an excellent antidote for stress and a fine cure for the pain of change. It also empowers you, bringing out your very best potential, and making you a more valuable employee.

Bottom line: Commitment is a gift you should give to yourself.

Takt Time for Winners

III. BENCHMARKING LOWERS COSTS, IMPROVES SERVICE AND      QUALITY
     By Gregory Watson

Ever wonder how successful organizations keep up with fast-breaking changes and yet provide high quality service year after year?

Industrial leaders use a technique called benchmarking. Benchmarking is discovering - legally - how other businesses perform better than you do. Then, you can learn from and improve upon their success. In accounts payable and customer service, the results of benchmarking are lower 
costs, improved service, higher quality, and better products.

In The Benchmarking Workbook, Gregory Watson recommends four steps for successful benchmarking: First, search for the companies that perform the selected process better; second, - observe what enables them to 
perform better; third, analyze what makes their process better than your own; and fourth, discuss how to adapt what you have learned to your process.

Experts urge you to look beyond leaders in just your industry. You can gain creative ideas from industries that seem unrelated. Example? Xerox made its warehouse organization more responsive to customer orders by copying the inventory system of mail order clothing house L. L. Bean!

Lean Production for Winners

IV. STILL TRUE AFTER ALL THESE YEARS: BEN FRANKLIN'S "Way to Wealth."

Who was the hottest business and self-improvement guru of the 1700s? Benjamin Franklin, American writer, inventor, statesman-and prominent businessman. In fact, Franklin's printing business was so successful that he retired at age forty-two.

Like many successful businesspeople today, Franklin published his secrets for success in an effort to help as many others as he could. His best-selling pamphlet, published in 1758, was called The Way to Wealth. Franklin's advice may seem simplistic compared to the sophisticated self-help books available today. Here you'll find such nuggets as "Early to bed, early to rise, makes a man healthy, wealth, and wise" and "God helps them who help themselves."

Of course, Franklin didn't originate these familiar clichés, and he was the first to say so. But his advice is timeless and fundamental, whether it is about industriousness and prudence, or about taking care of business and watching our pennies. As one of the original self-made Americans, Franklin continues to exert an influence on our society's business values.

Takt Time for Winners

VI. BUSINESS ANECDOTES AND FAMOUS QUOTES

      From: The Tortoise's Little Green Book of Winning Theories 
                by Robert J. Ringer

MAKABLE-DEAL THEORY - Expand your efforts in working hard to find one makable deal, rather than working hard on an endless number of unmakable deals and clinging to the faint hope that you will somehow close one. 

REALITY THEORY - Reality isn't the way you wish things to be, nor the way they appear to be, but the way they actually are. Either you acknowledge reality and use it to your benefit, or it will automatically work against you.

TIMING THEORY - Conditions are never right at the right time; the timing is always wrong! If you're waiting for everything to be just right before taking action, you are in possession of a foolproof excuse for failure.

TORTOISE AND HARE THEORY - Your quickness out of the starting blocks makes for interesting conversation, but the payoff is based on where you are when the race is over.

ZIP-THE-LIP THEORY - if you've got something good going, shut up!

"If hard work were such a wonderful thing, surely the rich would have kept it all to themselves."
- - - Lane Kirkland

"The mechanics of running a business are really not very complicated when you get down to essentials. You have to make some stuff and sell it to somebody for more than it cost you. That's about all there is to it, except for a few million details."
- - -John L. McCaffrey

"If you pick up a starving dog and make him prosperous, he will not bite you. This is the primary difference between a dog and a man.
- - - Mark Twain