Shipulski On Design

Environmental stability, aka, Green, is just starting. Most are still in reluctant compliance mode, hoping beyond hope that this newest of corporate initiatives dies on the vine, that it’s just another corporate initiative. Wrong. Very wrong. It’s the way we’re going to grow our business; it’s the way we’re going to make money. It’s time to open our minds, grab Green by the throat, and shake it. Green is here to stay, and Green will demand we change our thinking, will make us see our problems differently, will require we dismantle our intellectual inertia, will require innovation.

Pretend you’re a manufacturer of jeans, the blue ones, the ones that feel so good when you put them on, the ones you’d like to wear to work if you could. (Maybe that’s just me.) Year-on-year your innovation efforts focus on adding pockets then removing them, adding holes then removing them, zippers here then there, dark wash then light, baggy then tight, and yellow stitching than red. What else can a jean innovator do?

Corporate sends the memo: “We’re going Green.” Green jeans. They hire the best sustainability consultants and you, the jean innovator, sit through the sustainability audit results. Their recommendation – reduce carbon footprint: use materials that consume less energy, reduce electricity in your factories, minimize distribution’s fuel costs, and reduce travel miles of your sales folks. Brilliant. Whatever we paid these guys, it was too much. But then they twist your brain. The carbon footprint from the use of your product dwarfs everything else. Your customers generate a massive carbon footprint when they wash and dry your jeans, and you have no control over it. Your jeans are made once and washed and dried countless times. Whoa. Your eyes roll back in your head. What’s a jean innovator to do? First thing – forget about the stupid pockets. Next, figure out how to reduce the carbon footprint generated by your customers. Define the problem and innovate. But what’s the problem?

Why do folks wash their jeans? The obvious answer – they’re dirty. Let’s figure a way to prevent jeans from getting dirty, right? No. The real answer – they stretch, they get baggy and don’t fit right; so we wash them to tighten things up. We wash CLEAN jeans because they get baggy, not because they’re dirty. Let’s fix that.

Believe it or not, there are many likely innovative solutions to make jeans de-baggy themselves, but that’s not the point. The point is we must innovate on jeans that reconfigure, and must not innovate on keeping jeans clean (though we may innovate on that down the road) and must not innovate on pockets, zippers, and stitching.

Green shaped our innovation work. We now have Green jeans that feel good and spring back after wearing and fit great on day two – no washing required. We now have Green jeans that save customers time and money while flattering their backside. But here’s the point – we would have never invented de-baggying jeans without opening our minds to Green as a way to grow our business, to Green as a way to make money. Reluctant compliance won’t get us there. Grab Green by the throat and shake it…before your competitors do.

Companies (and countries) are slowly learning that moving manufacturing to low cost countries is a big mistake, a mistake of economy-busting proportion. (More costly than any war.) With labor costs at 10% of product cost, saving 20% on labor yields a staggering 2% cost savings. 2%. Say that out loud. 2%. Are you kidding me? 2%? Really? Moving machines all over the planet for 2%? What about cost increases from longer supply chains, poor quality, and loss of control? Move manufacturing to a country with low cost labor? Are you kidding me? Who came up with that idea? Certainly not a knowledgeable manufacturing person. Don’t chase low cost labor, design it out.

(I feel silly writing this. This is so basic.  Blocking-and-tackling. Design 101. But we’ve lost our way, so I will write.)

Use Design for Assembly (DFA) and Design for Manufacturing (DFM) to design out 25-50% of the labor time and make product where you have control. The end. Do it. Do it now. But do it for the right reasons – throughput, and quality.  (And there’s that little thing about radical material cost reduction which yield cost savings of 20+%, but that’s for another time).

The real benefit of labor reduction is not dollars, it’s time. Less time, more throughput. Half the labor time, double the throughput. One factory performs like two. Bring it back. Fill your factories. Repeat the mantra and you’ll bring it back:

Half the labor and one factory performs like two.

QC stands for Quality Control. No control, no quality. Ever try to control things from 10 time zones in the past? It does not work. It has not worked. Bring it back. Bring back your manufacturing to improve quality. Your brand will thank you. Put the C back in QC – bring it back.

Forward this to your highest level Design Leaders. Tell them they can turn things around; tell them they’re the only ones who can pull it off; tell them we need; tell them we’re counting on them; tell them we’ll help; tell them to bring it back.

Warranty cost: not a glamorous subject, but an important one.  It’s a great surrogate for what your customers experience.  Some companies try to reduce warranty costs by trimming their warranty policies — reducing costs but offering customers less.  Bad idea, kind of like increasing insurance deductibles and co-pays.  Warranty cost is best reduced by increasing product robustness — how well it functions over a wide range of inputs (or uses).

Here’s a link to Assembly Magazines’ Assembly Summit which will be held in Clearwater  Beach Florida on October 18-20, where I’ll present on warranty cost reduction of 75%.

Assembly Magazine’s Assembly Summit — How we radically reduce warranty cost (Oct. 19 at 2:00).

For a preview, take a look at this short video on warranty reduction.  The mindset — reduce warranty cost and design out product cost AT THE SAME TIME.  AT THE SAME TIME.

This week is an anniversary of sorts.  So, I thought I’d share the most popular posts over the last twelve months.  Here are the top 5:

1. Who Owns Cost
2. The Dumb-Ass Filter
3. DFA Saves More Than Six Sigma and Lean
4. Fasteners Can Consume 20-50% of Assembly Time
5. DFMA Won’t Work

If over the last twelve months a post helped you with your thinking, please take a minute to submit a comment and share your learning.  Or, pay it forward and share your learning with a friend.

Thanks for reading.

Your purchasing manager was just fired due to skyrocketing shipping costs now that you build product in a country with low cost labor.

You must hold a national press conference to explain how lead paint was put on your product by your supplier in a country with low cost labor.

You get up at 3:00 a.m. (for the fourth night in a row) to talk about a quality problem with a factory in a country with low cost labor.

You must cancel your lean projects because all your black belts are still solving quality problems in a country with low cost labor.

Though you have many half empty factories in your home country, you have a plan to build a new one in country with low cost labor.

Your best manufacturing leader just quit (via text message) because she wants to live with her family and not in a country with low cost labor.

Your purchasing manager’s brand new replacement was just fired because inventory carrying costs are through the roof now that you build product in a country with low cost labor.

You must find a landfill to bury three months of bad product now on a slow boat from a country with low cost labor.

Your new product launch is delayed because you have to tear down the machines and move them to a country with low cost labor.

The financial types that run your company are too far removed from the work so their only trick is to move it to a country with low cost labor.

Focus, focus, focus. Measure, measure, measure. We draw organizational boxes, control volumes, and measure ins and outs. Cost, quality, delivery.

Control volumes? Open a Ziploc bag and pour water in it. The bag is the control volume and the water is the organizational ooze. Feel free to swim around in the bag, but don’t slip through it because you’ll cross an interface. You’ll get counted.

Organizational control volumes are important. They define our teams and how we optimize (within the control volumes).  We optimize locally. But there’s more than one bag in our organizations.

The red team designs new products. They wear red shirts, red pants, and red hats. They do red things. We measure them on product function. The blue team makes products. They wear blue and do blue things. We measure them on product cost. Both are highly optimized within their bags, yet the system is suboptimal. Nothing crosses the interface – no information, no knowledge, no nothing. All we have is red and blue. What we need is purple.

We need people with enough courage to look up one level, put on a blue shirt and red pants, and optimize at the system level. We need people with enough credibility to swap their red hat for blue and pass information across the interface. We need trusted people to put on a purple jumpsuit and take responsibility for the interface.

Purple behavior cuts across the fabric of our metrics and control volumes, which makes it difficult and lonely. But, thankfully some are willing to be purple. And why do they do it?  Because they know customers see only one color – purple.

Companies pursue lots of ideas; some turn out well and some badly. Since we can’t tell with 100% certainty if an idea will work, bad ones are a cost of doing business. And it makes sense to tolerate them. The cost of a few bad ones is well worth the upside of a game-changer. It’s like the VC model.

However, there’s a class that must be avoided at all costs: the dumb-ass idea – an idea we should know will not work before we try it. It’s not a bad idea,  it’s beyond stupid, it’s deadly.

A dumb-ass idea violates fundamentals.

What’s so scary is today’s ready, fire, aim pace makes us more susceptible than ever. Our dumb-ass antibodies need strengthening. We need an immunization, a filter to discern if we’re respecting the fundamentals. We need a dumb-ass filter.

To immunize ourselves it’s helpful to understand how these ideas come to be. Here are some mutant strains:

Local optimization – We improve part of the system at the expense of the overall system. Chasing low cost labor is a good example where labor savings are dwarfed by increased costs of logistics, training, quality, and support.

A cloudy lens – We come up with an idea based on incomplete, biased, or inappropriate data. A good example is financial data which captures cost in a most artificial way. Overhead calculation is the poster child.

Cause and effect – We don’t know which is which; we confuse symptom with root cause and correlation with causation. Expect the unexpected with this mix up.

Scaling – We assume success in the lab is scalable to success across the globe. Everything does not scale, and less scales cost effectively.

Fear – We want to go fast because our competition is already there; we want to go slow because were afraid to fail.

What’s the best dumb-ass filter? It’s a formal and simple definition of the fundamentals. Use one page thinking – fundamentals one page, lots of pictures and few words. There’s no escape.

How to go about it? Settle yourself. Catch your breath. Let your pulse slow. Then, create a one pager (pictures, pictures, pictures) that defines the fundamentals and run it by someone you trust, someone without a vested interest, someone who has learned from their own dumb-ass thinking. (Those folks can spot it at twenty paces.) Defend it to them. Defend it to yourself. Run yourself through the gauntlet.

What are the fundamentals? Do they apply in this situation? How do you know? Answer these and you’re on your way to self-inoculation.

What if it was cool to make stuff? What if we advertised manufacturing’s coolness like we advertise beer and cigarettes? Who would be the celebrity spokesman?

What if we took as much pride in university manufacturing programs as with their football programs? What if great manufacturing programs were as profitable as great football programs? What if fans jammed college stadiums every Saturday to cheer manufacturing competitions? What if they were televised like football games? Who would host the pre-game show?

What if manufacturing was valued like professional sports? The World Series of Manufacturing, The Super Bowl of Manufacturing, The World Cup of Manufacturing? Who would do color commentary?

What if manufacturing thought leaders were celebrated like sports legends? What would kids want to be when they grew up? Whose face would be on the cereal boxes?

What if government understood the importance of manufacturing? Who would lead the charge?

We live in the country. Trees and wildlife all around. Can’t see our neighbors. A great place to be if you like the outdoors. We have two dogs – Abe and Lola.

The dilemma: How to let the dogs run around outside but prevent them from running off into the wilderness? The technological solution: an electric dog fence, an underground wire around the perimeter, a receiver hung on the dogs’ collars, and little white flags to designate the safe zone. The rules are straightforward and clear: 1. Stay within the perimeter and it’s happy happy: strut around, bark at smells and sounds, and guard the perimeter against the invading UPS truck. 2. Go outside the perimeter and all hell breaks loose: a nasty jolt from the collar, tail between the legs, and general disorientation. All is well.

But it’s not purely a technological system. There are dogs involved – thinking beings. They must understand the rules, they need training, and they must live within the system day-to-day. No matter what the situation, even if not covered in the training, they must stay within the perimeter or pay the price.

The people world has a similar dilemma: How to give the right amount of freedom and set the right limits. Boundaries are established, though not as formally or as simply as the flags; we live within the perimeter day-to-day or face consequences, though shock collars should not be used; and the thinking beings are more important than technology.

And, there is no right way to place the white flags – perimeters can be too big or too small; there is no right consequence level – the jolt can be too severe or too muted; and there is no perfect training – too much or too little. However, there must always be respect for the thinking beings.

One day I was in the yard with Abe and his new, high powered collar intended to stop his socializing, when a deer crossed the driveway about 50 meters outside the perimeter. Without hesitation, without consideration of consequence, he broke ranks and exploded though the perimeter – right through without a yelp, flinch, or twitch. He was in the moment, he did what he was made to do, he lived up to his genetics, he was all dog, he was himself. It was beautiful to watch him tear down the driveway.

As I watched the chase I thought about the power of his singular focus blasting him through without even a yelp. Then the realization – I never fixed the break in the wire – the fence was off. Flags without sting, though Abe did not know it.

The sting would not have prevented the chase, but would it have prevented the next one? I hope not. Perimeters can be too tight and consequences too severe, preventing us from being in the moment, doing what we’re made to do, living up to our genetics, and depriving us from experiencing our full selves.

Maybe I won’t fix the fence – flags without sting seems about right.

Cost Out, Cost Down, Cost Reduction, Should Costing – you’ve heard about these programs. But they’re not what they seem. Under the guise of reducing product costs they steal profit margin from suppliers. The customer company increases quarterly profits while the supplier company loses profits and goes bankrupt. I don’t like this. Not only is this irresponsible behavior, it’s bad business. The savings are less than the cost of qualifying a new supplier. Shortsighted. Stupid.

The real way to do it is to design out product cost, to reduce the cost signature. Margin is created and shared with suppliers. Suppliers make more money when it’s done right. That’s right, I said more money. More dollars per part, and not more from the promise of increased sales. (Suppliers know that’s bullshit just as well as you, and you lose credibility when you use that line.) The Design Engineering community are the only folks that can pull this off.

Only the Design Engineers can eliminate features that create cost while retaining features that control function. More function, less cost. More margin for all. The trick: how to get Design Engineers involved.

There is a belief that Design Engineers want nothing to do with cost. Not true. Design Engineers would love to design out cost, but our organization doesn’t let us, nor do they expect us to. Too busy; too many products to launch; designing out cost takes too long. Too busy to save 25% of your material cost? Really? Run the numbers – material cost times volume times 25%. Takes too long? No, it’s actually faster. Manufacturing issues are designed out so the product hits the floor in full stride so Design Engineers can actually move onto designing the next product. (No one believes this.)

Truth is Design Engineers would love to design products with low cost signatures, but we don’t know how. It’s not that it’s difficult, it’s that no one ever taught us. What the Design Engineers need is an investment in the four Ts – tools, training, time,  and a teacher.

Run the numbers.  It’s worth the investment.

Material cost x Volume x 25%

What happened to Vacation? It used to be a time to let go, to separate from work, to engage with family and friends, to work hard on something else. A time to refresh, to recharge, to renew. Not anymore – a shadow of its former self – paler, thinner, hunched over.

We still stay out of the office in a physical sense, but not in a virtual one. Our butts may be “on vacation” in that we sit someplace else, but our brains are not. They’re still fully invested in office things, running in the background as our butts enjoy their vacation. We’ve got all the downside of being out of the office with none of the upside. It’s almost worse than not having vacation. At least we don’t fall behind when not on vacation.

Who’s to blame? The technology? Our company? I don’t think so. We are. Sure the technology makes it easy: cell coverage across the globe (accept in New Hampshire), fast connections, nice screens, and full thumb keyboards to crank out the email. But, if I’m not mistaken, those little pda bastards still have an off switch. If your thumb can pound the keys, it can certainly mash the off switch. Can’t shut the damn thing off because you want to respond to the emergency work call? That’s crap. Work emergencies don’t exist, they’re artificial, self-made.  We create them to increase the sense of urgency. Don’t buy that? Here’s another rationale: you’re not giving others the opportunity to think while you’re gone. You’re telling them they’re not capable of thinking for themselves, you’re dismantling their self esteem, and hindering their growth.

Our company? Sure, they make it hard to let go, with implications that important projects must run seamlessly, that the ball must still be advanced. But, we’re the ones who decide what our brains think about. We must decide to give others an opportunity to shine, to give away the responsibility to someone who can likely do it better. If you ask the company what they want when we return, they’ll say they want us to come back recharged, ready to see things differently, ready to be creative, ready to be authentic. You cannot be that person without letting go. Without letting go, you’ll return the same worn soul who can but raft downstream with the current instead of swimming violently against it.

Take responsibility for your vacation. Own it, tell others you own it. Tell them you’re serious about letting go, working hard on something else, recharging. Use the all powerful Out of Office AutoReply as it was intended, to set everyone’s expectations explicitly (including your own).

Out of Office AutoReply: I am on vacation.