Monday, February 28, 2011
Thursday, February 24, 2011
Chinese Manufacturing in North America
By Al Norval,
Sounds strange but studies by the business press are showing that in 2011, China will invest more in North America than North American companies will invest in China. This is a real reverse of recent history whereas short a time as a few years ago in 2005, outside investment in China was seven times Chinese investment in other countries.
The reasons are many and I won’t try to admit that I have all of the answers but I have come across a few interesting facts. Sure the Yuan is appreciating against other currencies making Chinese products more expensive abroad but I believe there is more to it than that. As the world becomes more competitive, factors other than pure manufacturing costs become more important. Shipping costs are a key reason given by Chinese Manufacturers as to why they locate outside of China. Shorter Lead times and wanting to be closer to their markets and their customers particularly for emerging technologies are other key reasons.
Does this sound like a Lean strategy? It may not be called Lean but it sure has the basics of Lean. Get close to the markets you serve so that you can understand your customers better. Thus that knowledge to develop value streams that can deliver products and services faster, with shorter lead times and with a better value proposition than your competitors.
Lean or just good business sense? Or both?
The reasons are many and I won’t try to admit that I have all of the answers but I have come across a few interesting facts. Sure the Yuan is appreciating against other currencies making Chinese products more expensive abroad but I believe there is more to it than that. As the world becomes more competitive, factors other than pure manufacturing costs become more important. Shipping costs are a key reason given by Chinese Manufacturers as to why they locate outside of China. Shorter Lead times and wanting to be closer to their markets and their customers particularly for emerging technologies are other key reasons.
Does this sound like a Lean strategy? It may not be called Lean but it sure has the basics of Lean. Get close to the markets you serve so that you can understand your customers better. Thus that knowledge to develop value streams that can deliver products and services faster, with shorter lead times and with a better value proposition than your competitors.
Lean or just good business sense? Or both?
Tuesday, February 22, 2011
Deming’s 14 Points for Top Management
By Al Norval and Pascal Dennis
Over the Holidays’, I was doing some catch-up reading and went back to some of the basics of Lean. Dr. Deming, the legendary quality guru from the latter half of the 20th century is still as relevant today as he was when he was 20, 30 or 50 years ago. I was struck by how simple yet deep his 14 Points for Management are. Take the first one for example – “Create constancy of purpose toward improvement of product and service, with aim to become competitive and stay in business and to provide jobs”.
He’s captured the essence of Strategy Deployment or Hoshin Kanri. The role of management is to set a True North, figure out what’s preventing you from delivering it and then align the organization to work towards executing strategies that will deliver it. True North can be defined as a “who and what you want to be as a company” in 3-5 years. It encompasses both the hard business goals that shareholders and financial types like but also the essence of what the company values. We can then test – are we delivering the business objectives we have and more importantly are we achieving them in a way that is consistent with our organizational values so that as we work towards our goals, we aren’t decimating the company and making foolish short term decisions that are inconsistent with our long term True North.
It’s difficult to engage our people in achieving our business objectives if we change True North and our strategic direction every year as we develop a new annual plan. People get confused and give up. Constancy of purpose gives us at stability over time that is very engaging for our people. It doesn’t mean we don’t change ever but we do so slowly and in a controlled manner.
So we focus our people on solving problems to help us achieve our True North and in doing so become competitive, stay in business, and provide jobs for our people just as in Dr. Deming’s first point.
Over the Holidays’, I was doing some catch-up reading and went back to some of the basics of Lean. Dr. Deming, the legendary quality guru from the latter half of the 20th century is still as relevant today as he was when he was 20, 30 or 50 years ago. I was struck by how simple yet deep his 14 Points for Management are. Take the first one for example – “Create constancy of purpose toward improvement of product and service, with aim to become competitive and stay in business and to provide jobs”.
He’s captured the essence of Strategy Deployment or Hoshin Kanri. The role of management is to set a True North, figure out what’s preventing you from delivering it and then align the organization to work towards executing strategies that will deliver it. True North can be defined as a “who and what you want to be as a company” in 3-5 years. It encompasses both the hard business goals that shareholders and financial types like but also the essence of what the company values. We can then test – are we delivering the business objectives we have and more importantly are we achieving them in a way that is consistent with our organizational values so that as we work towards our goals, we aren’t decimating the company and making foolish short term decisions that are inconsistent with our long term True North.
So we focus our people on solving problems to help us achieve our True North and in doing so become competitive, stay in business, and provide jobs for our people just as in Dr. Deming’s first point.
Monday, February 14, 2011
Going to Gemba
by Pascal Dennis
Most of us know the value of going to Gemba and few disputes that it’s the right thing to do. So why do so few Executives actually “Go to Gemba”?
The most common issue I hear is they don’t have time to “Go to Gemba”. There is some truth in that so here are a couple of potential countermeasures that will create time for leaders. Biggest item is to spend less time on e-mail. It’s a business killer complete with interruptions and distractions that break your train of thought. Instead, get out of the office and put away the BlackBerry or iPhone and spend time walking around actually talking to employees.
Not just idle chit chat but actually talking about the business. Learn what is actually happening, seek employee input, listen for obstacles preventing them from doing their job, and help them solve their problems in a way which is consistent with the values of the organization. Teach people to fish rather than just giving them a fish. Imagine the power behind that.
Another method to use is the half hour meeting. Each meeting needs to have a Purpose, Agenda and Expected Outcome. Without that we just have milling around which becomes a huge time waster. Follow a set process and you’ll be amazed at what you can accomplish in half the time.
I’m often amazed by the synergistic effect between these two. The more time spent at Gemba, the more you know about what’s actually happening, so the less time you need to spend in meetings trying to figure out what’s going on, and the faster you’ll solve small problems before they become large business killers.
Most of us know the value of going to Gemba and few disputes that it’s the right thing to do. So why do so few Executives actually “Go to Gemba”?
The most common issue I hear is they don’t have time to “Go to Gemba”. There is some truth in that so here are a couple of potential countermeasures that will create time for leaders. Biggest item is to spend less time on e-mail. It’s a business killer complete with interruptions and distractions that break your train of thought. Instead, get out of the office and put away the BlackBerry or iPhone and spend time walking around actually talking to employees.
Not just idle chit chat but actually talking about the business. Learn what is actually happening, seek employee input, listen for obstacles preventing them from doing their job, and help them solve their problems in a way which is consistent with the values of the organization. Teach people to fish rather than just giving them a fish. Imagine the power behind that.
I’m often amazed by the synergistic effect between these two. The more time spent at Gemba, the more you know about what’s actually happening, so the less time you need to spend in meetings trying to figure out what’s going on, and the faster you’ll solve small problems before they become large business killers.
Monday, February 7, 2011
Lean helping people stay connected
By Pascal Dennis,
Hoshin Kanri or Strategy Deployment has a few parts to it that aren’t well known. One of them is to tell the strategy as a story. Not just a bland story but as an interesting, compelling, persuasive story. Storytelling is a great method for teaching and for engaging employees. Imagine people sitting on the edge of their seats leaning forward listening intently to the story of a company’s strategy. Contrast that with the image of an endless series of PowerPoint slides that go on and on with people talking blah-blah-blah. True PowerPoint junk.
Storytelling forces dialogue and creates an emotional connection between storyteller and receiver. That connection enables people to take on challenges more willingly and more rapidly. Employees will also take on more risk since they had a part in developing the strategy.
It’s key that the story reveal the essence of the strategy and reinforce the values and brand of the organization. Another tip is to avoid talking too long and rambling on. The story should be told in less than 10 minutes. Less is more! Avoid painting too rosy a picture in the story. Employees will see through it and the story will lose credibility.
It’s incredible to watch teams deploy strategy in a series of stories followed by an intense dialogue on the merits of the various parts of the story. All of which occurs in less than half an hour. Talk about a Lean process.
Hoshin Kanri or Strategy Deployment has a few parts to it that aren’t well known. One of them is to tell the strategy as a story. Not just a bland story but as an interesting, compelling, persuasive story. Storytelling is a great method for teaching and for engaging employees. Imagine people sitting on the edge of their seats leaning forward listening intently to the story of a company’s strategy. Contrast that with the image of an endless series of PowerPoint slides that go on and on with people talking blah-blah-blah. True PowerPoint junk.
Storytelling forces dialogue and creates an emotional connection between storyteller and receiver. That connection enables people to take on challenges more willingly and more rapidly. Employees will also take on more risk since they had a part in developing the strategy.
It’s key that the story reveal the essence of the strategy and reinforce the values and brand of the organization. Another tip is to avoid talking too long and rambling on. The story should be told in less than 10 minutes. Less is more! Avoid painting too rosy a picture in the story. Employees will see through it and the story will lose credibility.
It’s incredible to watch teams deploy strategy in a series of stories followed by an intense dialogue on the merits of the various parts of the story. All of which occurs in less than half an hour. Talk about a Lean process.
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