Shipulski On Design

Rumor has it, manufacturing is back. Yes, manufacturing jobs are coming back, but they’re coming back in dribbles. (They left in a geyser, so we still have much to do.) What we need is a fire hose of new manufacturing jobs.

Manufacturing jobs are trickling back from low cost countries because companies now realize the promised labor savings are not there and neither is product quality. But a trickle isn’t good enough; we need to turn the tide; we need the Mississippi river.

For flow like that we need a fundamental change. We need labor costs so low our focus becomes good quality; labor costs so low our focus becomes speed to market; labor costs so low our focus becomes speed to customer. But the secret is not labor rate. In fact, the secret isn’t even in the factory.

The secret is a secret because we’ve mistakenly mapped manufacturing solely to making (to factories). We’ve forgotten manufacturing is about designing and making. And that’s the secret: designing – adding product thinking to the mix. Design out the labor.

There are many names for designing and making done together. Most commonly it’s called concurrent engineering. Though seemingly innocuous, taken together, those words have over a thousand meanings layered with even more nuances. (Ask someone for a simple description of concurrent engineering. You’ll see.) It’s time to take a step back and demystify designing and making done together. We can do this with two simple questions:

• What behavior do we want?
• How do we get it?

What’s the behavior we want? We want design engineers to understand what drives cost in the factory (and suppliers’ factories) and design out cost. In short, we want to connect the engineer to the factory.

Great idea. But what if the factory and engineer are separated by geography? How do we get the behavior we want? We need to create a stand-in for the factory, a factory surrogate, and connect the engineer to the surrogate. And that surrogate is cost. (Cost is realized in the factory.) We get the desired behavior when we connect the engineer to cost.

When we make engineering responsible for cost (connect them to cost), they must figure out where the cost is so they can design it out. And when they figure out where the cost is, they’re effectively connected to the factory.

But the engineers don’t need to understand the whole factory (or supply chain), they only need to understand places that create cost (where the cost is.) To understand where cost is, they must look to the baseline product – the one you’re making today. To help them understand supply chain costs, ask for a Pareto chart of cost by part number for purchased parts. (The engineers will use cost to connect to suppliers’ factories.) The new design will focus on the big bars on the left of the Pareto – where the supply chain cost is.

To help them understand your factory’s cost, they must make two more Paretos. The first one is a Pareto of part count by major subassembly. Factory costs are high where the parts are – time to put them together. The second is a Pareto chart of process times. Factory costs are high where the time is – machine capacity, machine operators, and floor space.

To make it stick, use design reviews. At the first design review – where their design approach is defined – ask engineering for the three Paretos for the baseline product. Use the Pareto data to set a cost reduction goal of 50% (It will be easily achieved, but not easily believed.) and part count reduction goal of 50%. (Easily achieved.) Here’s a hint for the design review – their design approach should be strongly shaped by the Paretos.

Going forward, at every design review, ask engineering to present the three Paretos (for the new design) and cost and part count data (for the new design.) Engineering must present the data themselves; otherwise they’ll disconnect themselves from the factory.

To seal the deal, just before full production, engineering should present the go-to-production Paretos, cost, and part count data.

What I’ve described may not be concurrent engineering, but it’s the most profitable activity you’ll ever do. And, as a nice side benefit, you’ll help turn around the economy one company at a time.

For the foreseeable future, there will be more work than time. Yet year-on-year we’re asked to get more done and year-on-year we pull it off. Most are already at our maximum hour threshold, so more hours is not the answer. The answer is productivity.

Like it or not, there are physical limits to the number of hours worked. At a reasonable upper our bodies need sleep and our families deserve our time. And at the upper upper end, a 25 hour day is not possible. Point is, at some point we draw a line in the sand and head home for the day. Point is, we have finite capacity.

As a thought experiment, pretend you’re at (or slightly beyond) your reasonable upper limit and not going to work more hours. If your work stays the same, your output will be constant and productivity will be zero. But since productivity will increase, your work must change. No magic here, but how to change your work?

Changing your work is about choice – the choice to change your work. You know your work best and you’re the best one to choose. And your choice comes down to what you’ll stop doing.

The easiest thing to stop doing is work you’ve just completed. It’s done, so stop. Finish one, start one is the simplest way to go through life, but it’s not realistic (and productivity does not increase.) Still, it makes for a good mantra: Stop starting and start finishing.

The next things to stop are activities that have no value. Stop surfing and stop playing Angry Birds. Enough said. (If you need professional help to curb your surfing habit, take a look at Leechblock. It helped me.)

The next things to stop are meetings. Here are some guidelines:

• If the meeting is not worth a meeting agenda, don’t go.
• If it’s a status meeting, don’t go – read the minutes.
• If you’re giving status at a status meeting, don’t go – write a short report.
• If there’s a decision to be made, and it affects you, go.

The next thing to stop is email. The best way I know to kick the habit is a self-mandated time limit. Here are some specific suggestions:

• Don’t automatically connect your email to the server – make yourself connect to it.
• Create an email filter for the top ten most important people (You know who they are.) to route them to your Main inbox. Everyone else is routed to a Read Later inbox.
• Check email for fifteen minutes in the morning and fifteen minutes in the afternoon. Start with the Main inbox (important people) and move to the Read Later inbox if you have time. If you don’t have time for the Read Laters, that’s okay – read them later.
• Create an email rule that automatically deletes unread emails in two days and read ones in one.
• Let bad things happen and adjust your email filters and rules accordingly.

Once you’ve chosen to stop the non-productive work, you’ll have more than doubled your productive hours which will double your productivity. That’s huge.

The tough choices come when you must choose between two (or more) sanctioned projects. There are also tricks for that, but that’s different post.

Don’t worry about your biggest competitor – they’re not your biggest competitor. You’ve not met your biggest competitor. Your biggest competitor is either from another industry or it’s three guys and a dog toiling away in their basement.

Certainly it’s impossible to worry about a competitor we’ve not met, but that’s just what we’ve got to do. We’ve got to use thought-shifting mechanisms to help us see ourselves from the framework of our unknown competitor.

Our unknown competitor doesn’t have much – no fully functional products, no fully built-out product lines, and no market share. And that’s where we must shift our thinking – to a place of scarcity – so we can see ourselves from their framework. We’ve got to look down (in the S-curve sense), sit ourselves at the bottom, and look up at our successful selves. It’s the best way to move from self-cherishing to self-dismantling.

To start, we must create our logical trajectory. First, define where we are and where we came from. Then, with a ruler aligned to the points, extend a line into the future. That’s our logical trajectory – an extrapolation in the direction of our success. Along this line we will do more of what got us here, more of what we’ve done. Without giving ground on any front, we will protect market share and build more. We’ve now defined how we see ourselves. We’ve now defined the thinking that could be our undoing.

Now we must force enlightenment on ourselves. We create an illogical trajectory where we see ourselves from a success-less framework. In this framework less is more; more-of-the-same is displaced with more-of-something-else; and success is a weakness. We know we’re sitting in the rights space when the smallest slice of incremental market share looks like a big, juicy bite – like it looks to our unknown competitor.

The disruptive technology created by our unknown competitor will start innocently. Immature at first, the disruptive technology will do most things poorly but do one thing better. Viewed from our success framework we will see only limitations and dismiss it, while our unknown competitors will see opportunity. We will see the does-most-things-poorly part and they’ll see the one-thing-better part. They will sell to a small segment that values the one-thing-better part.

In another variant, an immature disruptive technology will do less with far less. From our success framework we will see “less” while from their scarcity framework they will see “more”. They will sell a simpler product that does less for a price that’s far less. (And make money.)

Here’s the one that’s most frightening: an immature technology that does all things poorly but does them without a fundamental limitation of our technology.  From our framework the limitation is so fundamental we won’t let ourselves see it. This limitation is un-seeable because we’ve built our business around it. (Think Kodak film.) This flavor of disruptive technology can put our business model out of business, yet we’ll dismiss it.

We’ll know we’ve shifted our thinking to the right place when we see our unknown competitors not as bottom-feeders but as hungry competitors who see our scraps as a smorgasbord.

We’ll know our thinking’s right when see not self-destruction, but self-disruption.

We’ll know all is right with the world we’re working on disruptive technologies to disrupt ourselves, disruptive technologies with the potential to create business models so compelling that we’ll gladly run from our success.

If I was a company, the first thing I’d do is invest in my engineering teams. But not for the reasons we normally associate with engineering. Not for more function and features, not for product robustness, not technology, and not patents. I would invest in engineering for increased profits.

When it comes to their engineering divisions, other companies think minimization – fewest heads, lowest wages, least expensive tools. Not me. I’m all about maximization – smartest, best trained, and the best tools. That’s how I like to maximize profits. To me, investing in my engineering teams gives me the highest return on my investment.

Engineers create the products I sell to my customers. I’ve found when my best engineers sit down and think for a while they come up with magical ideas that translate into super-performing products, products with features that differentiate me from my cousin companies, and products that flat-out don’t break. My sales teams love to sell them (Sure, I pay a lot in bonuses, but it’s worth it.), my marketing teams love to market them, and my factory folks build them with a smile.

Over my life I’ve developed some simple truisms that I live by: When I sell more products, I make more profits; when my products allow a differentiated marketing message, I sell more and make more profits; and when my product jumps together, my quality is better, and, you guessed it, I make more profits. All these are good reasons to invest in engineering, but it’s not my reason. All this increased sales stuff is good, but it’s not great. It’s not my real reason to invest in engineering. It’s not my secret.

When I was younger I vowed to take my secret to the grave, but now that I’ve matured (and filled up several banks with money), I think it’s okay to share it. So, here goes.

My real reason to invest in engineering is material cost reduction. Yes, material cost reduction. My materials budget is one of my largest line items and I help my engineers reduce it with reckless abandon (and the right tools, time, training, and teacher.) I’ve asked my lean folks to reduce material cost, but they’ve not been able to dent it. Sure, they’ve done a super job with inventory reduction (I get a one-time carrying cost reduction.), but no material cost reduction from my lean projects. I’ve also asked my six sigma organization to reduce material costs, but they, too, have not made a dent. They’ve improved my product quality, but that doesn’t translate into piles of money like material cost reduction.

Now, I know what you’re thinking: Why, Mrs. Company, are you wasting engineering’s time with cost? Cost is manufacturing’s responsibility – they should reduce it, not engineering. Plain and simple – that’s not what I believe, and neither do my engineers. They know they create cost to enable function, good material cost – worth every penny. But they also know all other cost is bad. And since they know they design in cost, they know they’re the ones that must design it out. And they’re good at it. With the right tools, time, and training, they typically reduce material costs by 50%. Do the math –material cost for your highest volume product times 50% – year-on-year. Piles of money.

I’ve learned over the years increasing sales is difficult and takes a lot of work. I’ve also learned I can make lots of money reducing material costs without increasing sales. In fact, even during the recent downturn, through my material cost reductions I made more money than ever. I have my design engineers to thank for that.

Company-to-company, I know things have been tough for us over the last years, and money is still tight. But if you have a little extra stashed away, I urge you to invest in your engineering organization. It makes for great profits.

Systematic DFMA Deployment – How To Implement for Increased Profits

I am running a half-day workshop on June 13 in Providence, RI.  The workshop is part of the 2012 International Forum on Design for Manufacturing and Assembly.  I will focus on how to increase profits and incorporate DFMA into your product development process.

CLICK TO REGISTER

The conference (June 11-13) is the yearly gathering of the world’s DFMA experts.  It is THE place to learn about DFMA and see examples and results from leading companies.

(I am also presenting a paper at the conference – Conference Program).

I urge the product development community to attend.

I hope to finally meet you in person.

Some thoughts on no:

• Yes is easy, no is hard.
• Sometimes slower is faster.
• Yes, and here’s what it will take:
• The best choose what they’ll not do.
• Judge people on what they say no to.
• Work and resources are a matched pair.
• Define the work you’ll do and do just that.
• Adding scope is easy, but taking it out is hard.
• Map yes to a project plan based on work content.
• Challenge yourself to challenge your thinking on no.
• Saying yes to something means saying no to something else.
• The best have chosen wrong before, that’s why they’re the best.
• It’s better to take one bite and swallow than take three and choke.

Your business is going away. Not if, when. Someone’s going to make it go away and it might as well be you. Why not take control and make it go away on your own terms? Why not make it go away and replace it with something bigger and better?

Success is good, but fleeting. Like a roller coaster with up-and-up clicking and clacking, there’s a drop coming. But with a roller coaster we expect it – there’s always a drop. (That’s what makes it a roller coaster.) We get ready for it, we brace ourselves. Half-scared and half-excited, electricity fills us, self-made fight-or-flight energy that keeps us safe. I think success should be the same – we should expect the drop.

More strongly we should manage the drop, make it happen on our terms. But that’s going to be difficult. Success makes it easy to unknowingly slip into protecting-what-we-have mode. If we’re to manage the drop, we must learn to relish it like the roller coaster. As we’re ascending – on the way up – we must learn to create a healthy discomfort around success, like the sweaty-palm feeling of the roller coaster’s impending wild ride.

A sky-is-falling approach won’t help us embrace the drop. With success all around, even the best roller coaster argument will be overpowered. The argument must be based on positivity. Acknowledge success, celebrate it, and then challenge your organization to improve on it. Help your organization see today’s success as the foundation for the future’s success – like standing on the shoulders of giants. But in this case, the next level of success will be achieved by dismantling what you’ve built.

No one knows what the future will be, other than there will be increased competition. Hopefully, in the future, your stiffest competitor will be you.

It’s tough out there. Last year we threw the kitchen sink at our processes and improved them, and now last year’s improvements are this year’s baseline. And, more significantly, competition has increased exponentially – there are more eager countries at the manufacturing party. More countries have learned that manufacturing jobs are the bedrock of sustainable economy. They’ve designed country-level strategies and multi-decade investment plans (education, infrastructure, and energy technologies) to go after manufacturing jobs as if their survival depended on them. And they’re not just making, they’re designing and making. Country-level strategies and investments, designing and making, and citizens with immense determination to raise their standard of living – a deadly cocktail. (Have you seen Hyundai’s cars lately?)

With the wicked couple of competition and profitability goals, we’re under a lot of pressure. And with the pressure comes the danger of seeing things how we want them instead of how they are, like a self-created optical illusion. Here are some likely optical illusion A-B pairs (A – how we want things; B – how they are):

Competition is severe and the pressure is real. And so is the danger to see things as we want them to be. But there’s a simple way to see things as they are: ask the people that do the work. Go to the work and ask the experts. They do the work day-in-day-out, and they know what really happens.  They know the details, the pinch points, and the critical interactions.

To see things as they are, check your ego at the door, and go ask the experts – the people that do the work.

At every turn, lean has increased profits in the factory. Its best trick is to look at the work through a time lens, see wasted time, and get rid of it.

Work is blocked by problems. You watch the work to spot blockages in the form of piles, otherwise known as inventory. When you find a pile, you know the problem is one operation downstream.

As lean works its magic, inventory is reduced, which decreases carrying costs. More importantly, however, it also reduces the time to see a problem. Whether the problem is related to quality, delivery or resources, everything stops immediately. It’s clear what to fix, and there’s incentive to fix it quickly because with lean, the factory is more sensitive to problems.

What works in the factory will also work in the supply chain, and that’s where lean is going.

Link to full article

Doing new things doesn’t take a long time. What takes a long time is seeing things as they are. Getting ready takes time, not doing new. Awareness of assumptions, your assumptions, others’ assumptions, the company’s – that’s critical path.

An existing design, product, service, or process looks as it does because of assumptions made during long ago for reasons no longer relevant (if they ever were). Design elements blindly carried forward, design approaches deemed gospel, scripted service policies that no longer make sense, awkward process steps proceduralized and rev controlled – all artifacts of old, unchallenged assumptions. And as they grow roots, assumptions blossom into constraints. Fertile design space blocked, new technologies squelched, new approaches laughed out of town – all in the name of constraints founded on wilted assumptions. And the most successful assumptions have the deepest roots and create the deepest grooves of behavior.

Cows do the same thing every day. They wake up at the same time (regardless of daylight savings), get milked at the same time, and walk the same path.  They walk in such a repeatable way, they make cowpaths – neat grooves walked into the landscape – curiously curved paths with pre-made decisions. No cow worth her salt walks outside the  cowpath. No need. Cows like to save their energy for making milk at the expense of making decisions. If it was the right path yesterday, it’s right today.

But how to tell when old assumptions limit more than they guide? How to tell when it’s time to step out of the groove? How to tell a perfectly good cowpath from one that leads to a dry watering hole? When is it time to step back and create new history? Long ago the first cow had to make a choice, and she did. She could have gone any which way, and she did. She made the path we follow today.

With blind acceptance of assumptions, we wither into bankruptcy, and with constant second-guessing we stall progress. We must strike a balance. We must hold healthy respect for what has worked and healthy disrespect for the status-quo. We must use forked-tongue thinking to pull from both ends. In a yin-yang way, we must acknowledge how we got here, and push for new thinking to create the future.

There is no progress without decisions. More strongly, decisions are unsung heroes of progress.

Decisions are powerful – things are different after a decision. (You are different after a decision.) Before a decision it’s one way, and after, another. And once a decision is made, the follow-on actions are clear, straightforward, transactional. In fact, the follow-on plan is justification for the decision. Decide this, do that. Decide the other, do something else. But decision is the hard part.

Progress is born from decisions and follow-on actions, but actions get attention and Gantt charts and decisions get short-suited. There is no project plan for deciding, no standard work. And it’s often unclear when a decision is made. Rarely is a decision documented. And once the organization recognizes a decision has evolved to stand on its own, the rationale and ramifications are unclear. And it’s unclear who birthed the decision. (The genetics of the parents define the status of the decision.)

There are two types of decisions: made decisions and unmade decisions. Made decisions are the ones we know, but it’s the slippery unmade decisions that are the troublemakers, the devious gremlins. Unmade decisions have a life force – they want to live, to remain undecided. (When unmade decisions are decided, they die.) That’s why it’s so hard to decide.

Over the millennia unmade decisions have developed natural defenses. Their best trick is camouflage. They know if they’re recognized, there’s a good chance they’ll be decided, and it’s over.  When they go to the meetings they hide in plain sight. They blend in with the wood grain of conference table or the texture of the ceiling tiles. They’re there, but hiding.

Unmade decisions know when they’re about to be decided – much like migratory birds sense gravitational fields. When they’re almost snared, they create complexity and divide into many, small, unmade decisions (think cellular division) and scatter. The increased complexity requires more decisions and enables at least some of themselves to live to fight another day.

But there’s hope. Unmade decisions get their life force from us – we decide how long they live; we choose not to see them; we choose to create complexity.

We must learn to spot unmade decisions, to call them out, and help our teams decide. At your next meeting, ask yourself if there’s an unmade decision hiding in plain sight. If there is, call it out, and decide if it should be decided.