COMPETITIVE KNOWLEDGE
NEWSLETTER
Let's get to it:
Our "ShowTime!'" workshop event held in San
Diego was a huge success. Attendees got a chance to actually work MRP and
lean manufacturing simulated factories and compare their performance
results.
The exercise called for the assembly of 20-lego towers in accordance with
the following order schedule…4-Red, 4-Yellow, and 12-Red. It was no
contest, the KBLM team built the towers in a record 8-minutes....their
performance yielded a 60% reduction to the MRP build time.
A workshop participant commented that he had learned more about MRP and
lean manufacturing in 4-hours of "ShowTime!" than at any full
day seminar he had previously attended.
Another participant observed how organized and under control the lean
manufacturing team was compared to the MRP team. (It wasn't the teams
doing...it was the KBLM production model.)
"ShowTime!" was such a success that we are taking it on the
road. First stop will be in San Jose, CA. If you want us to present
"ShowTime!" in your area, go to the below URL and fill out our
"help us plot the tour" form. No obligation, of course.
http://bbasicsllc.com/4.htm
If your in the San Jose area and wish to know more about
"ShowTime!" and how to register, simply go to:
http://bbasicsllc.com/showtime.htm
Our lead article today "Never, Never Rest On Your Achievements"
highlights two of my real world experiences and how the "performance
bar" keeps getting higher and higher. Price Pritchett is back with
another article from his
"New Work Habits For A Radically Changing World." Our third
article provides an insight into, "Six Hard-And-Fast Rules For
Negotiating." Price Trends fills out the fourth slot and "Making
Teamwork Really Work" is our closing article.
You are welcome to print and share this newsletter with your business
associates. We have indexed and archived this and all previous newsletters
for your reference. Copying the below URL link to your browser and
clicking
on "GO" will display the archive's "point and click"
index:
http://www.bbasicsllc.com/ckn.htm
This newsletter has reached your desk because I think we share a common
objective---to help manufacturing teams avoid "burnout" while
achieving their full performance potential. If this is not the case,
simply send us an e-mail with "Unsubscribe" as your subject and
you will be removed from our e-mailing list.
Enjoy,
Bill Gaw
COMPETITIVE KNOWLEDGE
NEWSLETTER
~ NOVEMBER 2001 ~
1. NEVER, NEVER REST ON YOUR
ACHIEVEMENTS
2. HOLD YOURSELF ACCOUNTABLE FOR OUTCOMES
3. SIX HARD-AND-FAST RULES FOR NEGOTIATING
4. PRICING TRENDS
5. MAKING TEAMWORK REALLY WORK
Just in Time manufacturing for Winners
1. NEVER, NEVER REST ON YOUR
ACHIEVEMENTS
by Bill Gaw
The following scenario is not uncommon in industry today:
"I don't care how you do it or what it takes, just make sure that
these damned machines are on a truck and on their way to the customer by
the end of the month!" screamed the general manager. It's six days
from the end of the month and the production manager has 75% of the
scheduled months shipments in final assembly with a parts shortage list
that reads like a horror story. Units are being sent to test with slave
components and it will take
another miracle to make the month's financial forecast.
It's now time to pull out all the stops…to hell with the procedures and
process controls…it's time for a few "knights in shining
armor" to once again salvage the most out of a terrible situation,
(usually self-inflicted).
During my early years in manufacturing, I had the opportunity to perform
as a "knight in shining armor" and I must admit that I enjoyed
the challenge, the
power struggle…and the politics of making difficult things happen in a
tumultuous manufacturing environment. In some ways, it was fun but in
others it was very stressful and unrewarding. Deep down, I always thought,
"There has to be a better way."
Well, as my career progressed, I was fortunate in joining a team of
professional manufacturing people at Johnson Controls in Milwaukee,
Wisconsin. Glenn Jonas had pulled together this dynamic team for the
purpose of turning around this marginally profitable company through
the design and implementation of a state-of-the art computerized
manufacturing control system, Materials Requirements Planning (MRP). Over
a two year period, I participated in Johnson Control's remarkable
turnaround
success story. Customer service performance up from 62% to 96%…on time
deliveries up from 78% to 97%…inventory turnover up from 1.6 to 6.3…
company growth up form an annual rate of 15% to 60%…and most important,
after tax profits up from 3% to 14%.
While all these gains were impressive, none was more welcomed than the
dramatic change in the day-to-day operating environment---from shop floor
pandemonium to a sense of controlled excitement. Everyone felt a
degree
of participation and contribution---it was a great rewarding experience.
Little did I know at that time that MRP was best employed as a materials
and capacity planning system and that shop floor control was a
misapplication of the MRP/ERP technology. As director of operations at
Palomar Systems, Escondido, California, I embraced the lean
manufacturing
and kaizen teachings of Schonberger - Costanza - Imai and pulled together
a lean manufacturing team of people that eventually became self-directed
and achieved manufacturing performance far greater than what was
originally achieved at Johnson Controls. Customer service performance up
from 58% to 99%…on time deliveries up from 61% to 99%…inventory
turnover up from 1.2 to 8.3…company growth up form an annual rate of 5%
to 120%…and most important, profit margin was increased from 32% to 54%.
So what's my experience got to do with you and your company? First, never
think that your achievements are the end of the challenge---your
competition is always learning new ways to outperform you. Second, you
have an opportunity to share in a similar experience---over the past year
and a half, I have been writing to you about the competitive advantages of
Kaizen Based Lean Manufacturing---now is a good time to combine this
methodology with MRP/ERP? It will help you lower factory stress levels,
end shop floor chaos and eliminate the "end-of-the-month"
crunch. Finally, take action, if you haven't explored the benefits of
Kaizen Based Lean Manufacturing…copy the below URL to your browser and
click on "GO"...
http://bbasicsllc.com
Even if your company is in the process of implementing flow technology
and/or lean manufacturing, this is your opportunity to gain exposure to
some practical tools and techniques that could boost your development
and
implementation efforts to a higher level. If, on the other hand, you are
still struggling with a shop order "launch and expedite" system,
KBLM will optimize your manufacturing performance and help your company
identify
and pursue their full growth and profit potential.
Just in Time manufacturing
for Winners
2. HOLD YOURSELF ACCOUNTABLE FOR
OUTCOMES
by Price Pritchett
Organizations are insisting on new levels of accountability in their
employees. Responsibility, power, and authority are being pushed down to
the lowest levels. For this to work, you have to stand accountable for
results.
Careers simply carry more personal exposure these days. And you can't get
off the hook by rationalizing, "I tried…I really worked hard…I
did high quality work…I did my part." "All of those lines
sound good on the surface, but
they won't sell if the overall results aren't there.
In these times of self-directed teams, empowered employees, and "boundaryless"
organizations, your worth as an individual employee will also get measured
by your work group's collective results.
Holding yourself personally accountable for outcomes requires that you
think broadly. Consider the big picture, Look beyond your own immediate
behavior---beyond the specifics of your job description---to see if you're
really
doing all you should to bring about the right results. Learn to work
across departmental boundaries. Avoid turf issues. Combine your efforts
seamlessly with others who, though very different from you, are
contributing to the same end results.
Concentrating on outcomes will also keep you from falling in love with a
particular methodology. Or to put it another way, you're less likely to
waste time, energy, and other resources on low-payoff work routines if
your real passion is for reaching results. Our work processes are always
cleanest when we design them to be solely in service of outcomes. So
streamline your approach. Eliminate unnecessary steps. Get rid of tasks no
one can justify.
So do your part. Drive the organization directly toward the outcomes that
count the most.
Just in Time manufacturing
for Winners
3. SIX
HARD-AND-FAST RULES FOR NEGOTIATING
by Harvey Mackay
Break the basic rules of negotiation and you lose, says
author and prominent business leader Harvey Mackay. It
comes down to discipline, he explains. Most people know
these rules, but great negotiators stick to these basics
like glue:
-
Negotiating with yourself is a sign of weakness.
Never
make another offer if the other side hasn't countered your
offer.
-
Refuse to negotiate with someone who doesn't have
the
authority to finalize the deal. That gives the other side
"two bites at the apple."
-
Don't assume something---even a contract---is non-
negotiable. They may deal if you call their bluff.
-
Practice by getting someone to take the other side,
and
then switch roles. Instincts are no match for
preparations,
-
Figure out what the other side wants. Hint: It's never
the
given reason.
-
Don't talk first. Their first offer might be better
than your
assumption.
Just in Time manufacturing
for Winners
4. PRICING TRENDS
from Bottom line/Business
Mixed
Or Weak
- Autos:
Rebates now average a 2001 high of $1800 per vehicle---with discounts
on some slow-moving luxury models running as high as $5,000.
- Magnesium:
More price cuts ahead---with ingot dropping another $0.03/lb. In 2002
(to $1.30/lb.)---on top of this year's likely $0.04/lb. decline.
- Mail:
he US Postal Service is now offering volume discounts of up
to 38% on two-to three-day international deliveries to more than 200
countries.
- Memory devices:
Prices of mainstream DRAM chips have dropped 80% over the past 12
months---with further softness likely through year-end as inventories
remain high.
- Paper:
Popular coated groundwood grades have dropped as much as 13% this
year, Reasons: Asian imports and substitution of cheaper
supercalendered grades.
New Products
- Computers:
Name-brand laptops are beginning to hit the market for less than
$1,000. Two with 128 megabytes of memory: Gateway's Solo 1200 and
Sony's Vaio SR33.
Heading Higher
- Health insurance:
HMOs are trying to keep average premium increases for 2002 at around
20%. Negotiating will often yield
somewhat smaller increases, but everyone will be paying more than the
10% to 12% increase projected earlier this year.
- Internet access:
Major broadband providers are adding up to $10 to the cost of
high-speed service---bringing the monthly rate to $45 t0 $50.
- Lumber:
Still-strong construction is pushing prices up. By late fall, some
2" x 4" grades should be running more than 20% above levels
one year ago.
Just in Time manufacturing
for Winners
5. MAKING TEAMWORK REALLY WORK
from an interview with Ken
Blanchard
To build your company team into a finely tuned, highly productive unit,
make sure its design includes the four key ingredients…
PURPOSE
To create a successful team, start by establishing a sense of purpose that
unites people and gives them common goals. To make that happen…
-
Define a challenge or reason for being. This should
capture the imagination of employees and make them feel committed and
motivated to work together---as if they're doing something truly
special.
-
Set clear and compelling goals…and strategies for
achieving those goals---for individuals and the team.
-
Create a written team charter that formalizes
individual members' commitment to one another. This document should
clearly state what the team wants to accomplish… how the team will
work together to achieve them.
SKILL BUILDING
For your team to fulfill its purpose, members must determine what skills
and competencies they already have and what they need to acquire or
develop. How to do it…
-
Identify and build the basic skills individuals need
to do their jobs effectively. These skills will be the building blocks
of team success.
-
Praise and reward behaviors that move the team closer
to its goals. Provide continuous positive feedback in order to build
each team member's confidence and accountability.
-
Require that team members learn each other's jobs.
Resilience is critical to a team's success. If one member is
absent--or leaves the company--the others must keep working smoothly.
TEAM POWER
Make sure team members commit to the idea that "none of us is as
smart or as creative as all of us." Then mobilize the team's
collective power by…
-
Sharing team leadership. That encourages group
flexibility and keeps the team's focus on group performance---not
individual egos, power or success.
-
Rewarding cooperative behavior and
achievements---behavior like passing the puck in hockey instead of
going for the goal every time.
A POSITIVE APPROACH
As head coach, your job is to keep team members focused on what's working
and what they can do to improve the team's effectiveness. How to do it…
-
Point out specific ways that team members can improve
their performance. Do not criticize or browbeat.
-
Provide advice and assistance when needed. Even the
best teams occasionally need some hands-on support from their leaders.
This includes being ready to redirect team members when they stray
from the team's mission. Being always available to each member is a
powerful, positive element in team success.
-
Manage change for positive outcomes. If a team member
leaves the company or a new member joins the team, acknowledge the
impact the change will have on existing members. Take the time to
adjust the team's goals and group dynamics when there is a change in
the team's membership.
