Shipulski On Design

Posts Tagged ‘Six Sigma’

If you want to grow the top line right now, create a hard constraint – the product cannot change – and force the team to look for growth outside the product. Since all the easy changes to the product have been made, without a breakthrough the small improvements bring diminishing returns. There’s nothing left here.  Make them look elsewhere.

If you want to grow the top line without changing the product, make it easier for customers to buy the products you already have.

If you want to make it easier for customers to buy what you have, eliminate all things that make buying difficult.  Though this sounds obvious and trivial, it’s neither. It’s exceptionally difficult to see the waste in your processes from the customers’ perspective.  The blackbelts know how to eliminate waste from the company’s perspective, but they’ve not been taught to see waste from the customers’ perspective.  Don’t believe me?  Look at the last three improvements you made to the customers’ buying process and ask yourself who benefitted from those changes.  Odds are, the changes you made reduced the number of people you need to process the transactions by pushing the work back into the customers’ laps. This is the opposite of making it easier for your customers to buy.

Have you ever run a project to make it easier for customers to buy from you?

If you want to make it easier for customers to buy the products you have, pretend you are a customer and map their buying process. What you’ll likely learn is that it’s not easy to buy from you.

How can you make it easier for the customer to choose the right product to buy? Please don’t confuse this with eliminating the knowledgeable people who talk on the phone with customers. And, fight the urge to display all your products all at once.  Minimize their choices, don’t maximize them.

How can you make it easier for customers to buy what they bought last time?  A hint: when an existing customer hits your website, the first thing they should see is what they bought last time.  Or, maybe, a big button that says – click here to buy [whatever they bought last time].  This, of course, assumes you can recognize them and can quickly match them to their buying history.

How can you make it easier for customers to pay for your product? Here’s a rule to live by: if they don’t pay, you don’t sell. And here’s another: you get no partial credit when a customer almost pays.

As you make these improvements, customers will buy more.  You can use the incremental profits to fund the breakthrough work to obsolete your best products.

“Shopping Cart” by edenpictures is licensed under CC BY 2.0

Most companies have growth objectives – make more, sell more and generate more profits. Increase profit margin, sell into new markets and twist our products into new revenue. Good news for the stock price, good news for annual raises and plenty of money to buy the things that will help us grow next year. But it’s not good for the people that do the work.

To increase sales the same sales folks will have to drive more, call more and do more demos. Ten percent more work for three percent more compensation. Who really benefits here? The worker who delivers ten percent more or the company that pays them only three percent more?  Pretty clear to me it’s all about the company and not about the people.

To increase the number of units made implies that there can be no increase in the number of people required to make them.  To increase throughput without increasing headcount, the production floor will have less time for lunch, less time for improving their skills and less time to go to the bathroom. Sure, they can do Lean projects to eliminate waste, as long as they don’t miss their daily quota. And sure, they can help with Six Sigma projects to reduce variation, as long as they don’t miss TAKT time. Who benefits more – the people or the company?

Increased profit margin (or profit percentage) is the worst offender.  There are only two ways to improve the metric – sell it for more or make it for less. And even better than that is to sell it for more AND make it for less. No one can escape this metric. The sales team must meet with more customers; the marketing team must work doubly hard to define and communicate the value proposition; the engineering staff must reduce the time to launch the product and make it perform better than their best work; and everyone else must do more with less or face the chopping block.

In truth, corporate growth is the fundamental behind global warming, reduced life expectancy in the US and the ridiculous increase in the cost of healthcare. Growth requires more products and more products require more material mined, pumped or clear-cut from the planet. Growth puts immense pressure on the people doing the work and increases their stress level. And when they can’t deliver, their deep sense of helplessness and inadequacy causes them to kill themselves. And healthcare costs increase because the companies within (and insuring) the system need to make more profit.  Who benefits here?  The people in our community? The people doing the work? The planet? Or the companies?

What if we decided that companies could not grow? What if instead companies paid dividends to the people do the work based on the profit the company makes? With constant output wouldn’t everyone benefit year-on-year?

What if we decided output couldn’t grow? What if instead, as productivity increased, companies required people to work fewer hours? What if everyone could make the same number of products in seven hours and went home an hour early, working seven and getting paid for eight? Would everyone be better off? Wouldn’t the planet be better off?

What if we decided the objective of companies was to employ more people and give them a sense of purpose and give meaning to their lives? What if we used the profit created by productivity improvements to employ more people? Wouldn’t our communities benefit when more people have good jobs? Wouldn’t people be happier because they can make a contribution to their community? Wouldn’t there be less stress and fewer suicides when parents have enough money to feed their kids and buy them clothes? Wouldn’t everyone benefit? Wouldn’t the planet benefit?

Year-on-year growth is a fallacy. Year-on-year growth stresses the planet and the people doing the work.  Year-on-year growth is good for no one except the companies demanding year-on-year growth.

The planet’s resources are finite; people’s ability to do work is finite; and the stress level people can tolerate is finite. Why not recognize these realities?

And why not figure out how to structure companies in a way that benefits the owners of the company, the people doing the work, the community where the work is done and the planet?

Image credit – Ryan

There are two domains – what is and what isn’t. We’re most comfortable in what is and we don’t know much about what isn’t. Neither domain is best and you can’t have one without the other. Sometimes it’s best to swim in what is and other times it’s better to splash around in what isn’t.  Though we want them, there are no hard and fast rules when to swim and when to splash.

Improvement lives in the domain of what is. If you’re running a Six Sigma project, a lean project or a continuous improvement program you’re knee deep in what is. Measure, analyze, improve, and control what is. Walk out to the production floor, count the machines, people and defects, measure the cycle time and eliminate the wasteful activities. Define the current state and continually (and incrementally) improve what is. Clear, unambiguous, measurable, analytical, rational.

The close cousins creativity and innovation live in the domain of what isn’t. They don’t see what is, they only see gaps, gulfs and gullies. They are drawn to the black hole of what’s missing. They define things in terms of difference.  They care about the negative, not the image. They live in the Bizarro world where strength is weakness and far less is better than less. Unclear, ambiguous, intuitive, irrational.

What is – productivity, utilization, standard work. What isn’t – imagination, unstructured time, daydreaming. Predictable – what is. Unknowable – what isn’t.

In the world of what is, it’s best to hire for experience.  What worked last time will work this time. The knowledge of the past is all powerful.  In the world of what isn’t, it’s best to hire young people that know more than you do. They know the latest technology you’ve never heard of and they know its limitations.

Improving what is pays the bills while creating what isn’t fumbles to find the future. But when what is runs out of gas, what isn’t rides to the rescue and refuels. Neither domain is better, and neither can survive without the other.

The magic question – what’s the best way to allocate resources between the domains? The unsatisfying answer – it depends. And the sextant to navigate the dependencies – good judgement.

Image credit – JD Hancock

I can’t believe everyone isn’t doing Design for Assembly (DFA), especially in these tough economic times. It’s almost like CEOs really don’t want to grow stock price. DFA, where the product design is changed to reduce the cost of putting things together, routinely achieves savings of 20-50% in material cost, and the same for labor cost. And the beauty of the material savings is that it falls right to the bottom line. For a product that costs $1000 with 60% material cost ($600) and 10% profit margin ($100), a 10% reduction in material cost increases bottom line contribution by 60% (from $100 to $160). That sounds pretty good to me. But, remember, DFA can reduce material cost by 50%. Do that math and, when you get up off the floor, read on.

Unfortunately for DFA, the savings are a problem – they’re too big to be believed. That’s right, I said too big. Here’s how it goes. An engineer (usually an older one who doesn’t mind getting fired, or a young one who doesn’t know any better) brings up DFA in a meeting and says something like, “There’s this crazy guy on the web writing about DFA who says we can design out 20-50% of our material cost. That’s just what we need.” A pained silence floods the room. One of the leaders says something like, “Listen, kid, the only part you got right is calling that guy crazy. We’re the world leaders in our field. Don’t you think we would have done that already if it was possible? We struggle to take out 2-3% material cost per year. Don’t talk about 20-50% because is not possible.” DFA is down for the count.

Also unfortunate is the name – DFA. You’ve got to admit DFA doesn’t roll off the tongue like six sigma which also happens to sound like sex sigma, where DFA does not. I think we should follow the lean sigma trend and glom some letters onto DFA so it can ride the coat tails of the better known methodologies. Here are some letters that could help:

Lean DFA; DFA Lean; Six Sigma DFA; Six DFA Sigma (this one doesn’t work for me); Lean DFA Sigma

Its pedigree is also a problem – it’s not from Toyota, so it can’t be worth a damn. Maybe we should make up a story that Deming brought it to Japan because no one in the west would listen to him, and it’s the real secret behind Toyota’s success. Or, we can call it Toyota DFA. That may work.

Though there is some truth to the previous paragraphs, the main reason no one is doing DFA is simple:

No one is asking the design community to do DFA.

Here is the rationalization: The design community is busy and behind schedule (late product launches). If we bother them with DFA, they may rebel and the product will never launch. If we leave them alone and cross our fingers, maybe things will be all right. That is a decision made in fear, which, by definition, is a mistake.

The design community needs greatness thrust upon them. It’s the only way.

Just as the manufacturing community was given no choice about doing six sigma and lean, so should the design community be given no choice about doing DFA.

No way around it, the first DFA effort is a leap of faith. The only way to get it off the ground is for a leader in the organization to stand up and say “I want to do DFA.” and then rally the troops to make it happen.

I urge you to think about DFA in the same light as six sigma or lean: If your company had a lean or six sigma project that would save you 20-50% on your product cost, would you do it? I think so.

Who in your organization is going to stand up and make it happen?

There is no question that Six Sigma helps companies make money. So much so that everyone in the manufacturing community knows the five hallowed letters: DMAIC (Define, Measure, Analyze, Improve, Control). It’s straightforward and fully wrung-out. But that’s not the case for the wicked step sister Design for Six Sigma (DFSS). She’s fundamentally different and more complicated. To start, it’s an alphabet soup out there. Here are some of the letters: DMADV, DMADOV, IDOV, and DMEDI, and there are likely more. Does everyone know these letters and what they stand for? Not me. But here is the fundamental difference: with DMAIC the thing to be improved already exists and with DFSS the thing to be created does not. In essence, there is no formalized problem to solve. So what you say?

With DMAIC it’s all about reducing variation relative to the specification; with DFSS there is no specification. In fact, there is no product yet a process on which we can measure variation. First the product itself must be created and its functional performance must be defined over a range of parameters. Only then is manufacturing variation measured relative to the range functional parameters (DMAIC). But I got ahead of myself.

Before creating the thing that does not exist and make sure it meets the functional specification, some mind reading of customer needs is required, an even lesser defined thing. So, there is a round of reading customers minds followed by round of creating something that does not exist to satisfy the customer needs define in the mind reading sessions. Oh yea, then the tolerances must be defined so the product always functions the way it’s supposed to. All this before we turn the DMAIC crank.

My point with all this is to help set expectations when dealing with product design/DFSS. It is wrong to expect the predictability and standardization of DMAIC when doing product design/DFSS.  It’s different.  Product design/DFSS is not the same turn-the-crank kind of operation. That is not to say there is zero predictability and standard work or that predictability is not something to strive for. It’s just different. With product design the problems are unknown at the start and sometime even the fundamental physics are unknown. Please keep this in mind when your product development projects are late relative to hyper aggressive, non-work-content-based schedules or when new products don’t meet the arbitrary cost targets.

John Teresco of Industry Week wrote a good article that shows how up upfront design enables the next level of improvments in Lean and Six Sigma.

Here are several excerpts:

At Hypertherm Inc., a manufacturer of plasma cutting systems, the DFMA software enabled a first pass part count reduction as high as 50%, says Mike Shipulski, Hypertherm’s director of engineering. About 500 parts were eliminated from the product, a main power supply sub-assembly that originally contained about 1,000 parts. Shipulski says the resulting reduction in assembly floor space requirements made it possible to satisfy a growing market demand within the existing building. “We didn’t have to add floor space.” Read the rest of this entry »