Business

3 Questions to Help Confirm a Company is Practicing Lean Product Development:

1. What is your new product introduction cadence?

What is the % on time, and percentage on budget? If not consistently on time & on budget, what is the gap you have to close?

 

Photo: conventional chaos vs lean credit: Dantar P. Oosterwall, The Lean Machine: How Harley-Davidson Drove Top-Line Growth and Profitability with Revolutionary Lean Product Development, p.106

Photo: conventional chaos vs lean

credit: Dantar P. Oosterwall,

The Lean Machine: How Harley-Davidson Drove Top-Line Growth and Profitability with Revolutionary Lean Product Development, p.106



2. Where are you applying set based concurrent engineering?




Photo: Denso trade off curvesCredit: Allen C. Ward, Durward K. Sobek, Lead Product and Process Development, 2nd ed. p.172

Photo: Denso trade off curves

Credit: Allen C. Ward, Durward K. Sobek,

Lead Product and Process Development, 2nd ed. p.172

3. Where are you using trade off curves in development?

Where is design/engineering creating trade off curves to supply reusable knowledge to accelerate product development?

 

Some questions I provided an institutional board member to help them validate whether their investment is applying lean business strategy.

If not, it is worth more than traditional financial analysis is capable of revealing.

GE 2020 Earnings Call - Digital Grid

GE Digital Grid 2020 Earnings Call.jpg

7:50

“In digital grid for example our team used problem solving and daily management to reduce quality defects by 25%.

This helped drive savings that enabled the business to grow operating profit by 60% in 2020.

As this team shows, you can apply lean in any part of the business, NOT just in manufacturing.”

 

“all leaders have action plans to run their businesses leaner with lower inventory levels. In aggregate, our focus and actions to improve working capital are starting to pay off.”

10 Important Shifts in Thinking People Don't Talk About with Lean

10 Important Shifts in Thinking People Dont Ever Talk About with Lean Karl Ohaus.jpg

Another great write up by Karl Ohaus, link here:

https://www.linkedin.com/pulse/10-important-shifts-thinking-people-dont-talk-lean-karl-ohaus



key points:

‘teams try to “implement Lean” without making critical shifts in leadership thinking’

‘it requires leadership to shift their thinking to be able to benefit organizations at all.’

‘Every defect is an opportunity to learn.’

‘If you are too busy to acknowledge that something is a problem, then your organization will be right there with you’

Launching Lean at Danaher

Jake Brake Danaher Results.jpg


my notes/key points from it:

“While they were pretty slow, way too expensive, and loved power point presentations, we did create our first couple of cells.”

 

“We even put potted plants in the first cell just to show how different the new look was.”

 

“We just did this because it made common sense.”

 

“These individuals were the real deal.”

 

“50 percent. Everything can be cut by 50 percent.” Later they told us they said 50 percent because they didn’t think we would want to hear the real number.  We liked that as we were only thinking about 30 percent

 

“listen and learn. Don’t push back. We found right away that lean (Just-inTime back then) was “learn-by-doing” and we wanted to learn.”

 

“Mark helped us initially in finance by moving us away from standard cost accounting and toward  something similar to what is now called lean accounting, and later became instrumental in creating/running the Danaher Business System (DBS). Switching to lean accounting was another big lesson as it allowed us to finally see what was going on and didn’t fight lean as standard cost accounting does. It also created great productivity in finance as Mark was able to go from 25 to 9 people and close the books in a day and a half.”

 

“all leaders need to emerge themselves in the details of lean and become lean experts themselves if they want to have a successful lean turnaround.”

 

“learning was the greatest strategic weapon we had ever seen.”

 

“cut your lead times from weeks to days, increase your productivity, drastically improve your quality and free up over half your floor space by removing the waste from your operations then you would have a huge strategic advantage.”

 

“A lot of times things didn’t work well at first (in fact most of the time) but we never let it go back to what it was. We just kept pushing till we solved the problems and made it work.”

 

“we involved the union in everything we did. We were always honest and up front with them. We treated them as equal partners.

we kept proving that every move we made was better for our work force we eventually formed a great relationship. We knew that the best ideas for removing the waste would come from the people doing the work, and that always proved to be true.”

“the Presidents of all 13 Danaher companies to be the lean drivers in their own companies. To do this we had to teach them lean… create the Presidents Kaizen.”

“all the Presidents to participate in a three-day kaizen every six weeks.  They weren’t too happy about this at first but the gains we got every time were so big that this quickly changed.”

“Mark DeLuzio created the M&A integration process as well as the due diligence process as it related to DBS. And along with Larry Culp, Danaher CEO (and now the CEO of GE), developed the strategic planning process for all of Danaher”

Applying Operational Excellence to Mining


"Balancing the workload among different production lines led to a 19.3% increase in productivity
(we did invest some money in modernizing our equipment and improving processes)."

The management team of a Lithuanian mining company explains how they are transforming themselves to overcome resistance to business change.

- machine efficiency rate went up 20%.
Main mobile equipment used to shut down for planned maintenance every 150 hours, whereas today it does only every 250.

article here: https://planet-lean.com/fighting-resistance-lean-mining

Overcoming-resistance-to-change-at-mining-company-Dolomitas.jpg

Learning fast in the crisis

20200415 Learning fast in the crisis.jpg


- Buying a company is never an easy step just 1 month ahead of a pandemic and lockdown. Results from a CEO spending time in the business instead of the office.
.
to learn about problems, find and face.

Organizational changes can be tempting when a new owner steps in, but they seldom help.
.


Lean thinking rather teaches us to focus on the flow of products and services to customers and observe what hinders the work of those operating along that flow.
.
They managed to reduce the lead-time for stainless steel trolleys 66% from 6 weeks to 2 weeks.

With overall volume of sales decreasing, the lockdown seems to be the perfect opportunity to revamp the workshop and learn how to better organize it.

read full article:

https://planet-lean.com/lean-learning-covid19

The Lean Trilogy - Mark Deluzio - Danaher

“they already have the person in place that should lead the transformation, the CEO.”

 

“The CEO must not only verbalize his commitment to the Lean Transformation, he must show it in his actions."

 

“If the CEO delegates away his responsibilities to a staff position within the company, the Lean transformation will stall and eventually fail. The CEO must be as committed to the process of the transformation as he is to the results.”

 

“a Lean transformation is all about people.”

 

“one must think about Lean as a growth strategy.”

 

“You may need to decide NOT to do business with a group of customers if employee and/or shareholder requirements are not met.”

https://markdeluzio.com/lean-trilogy

The E Myth Revisited

Gerber, M

Probably better to just read the whole thing to ensure you understand it.

xiii

- People who are exceptionally good in business have an insatiable need to know more

- Problem with most failing businesses is not that their owners don’t know enough about finance, marketing, operations – they don’t, but they can learn – but they spend their time and energy defending what they think they know. The greatest business people are determined to get it right no matter the cost.

Xiv

- there is something uplifting, some vision, some higher end in sight that “getting it right” would serve

- extraordinarily grounded people, compulsive about detail, pragmatic, down to earth, in touch with seamy reality of ordinary life. They know a business doesn’t miss the mark by failing to achieve greatness in some lofty, principled way, but in the stuff that goes on in every nook and cranny of the business – on the phone, between the customer and a salesperson, on the shipping dock, at the cash register

- possess an intuitive understanding that the only way to reach something higher is to focus their attention on the multitude of seemingly insignificant, unimportant, and boring things that make up every business.

Xv

- a genuine fascination for the truly astonishing impact little things done exactly right can have on the world

p1

- small businesses simply do not work; the people who own them do

o they’re doing the wrong work

p13

Fatal Assumption:

if you understand the technical work of a business, you understand a business that does that technical work

p32

- “I wonder what that business would be?” is the truly entrepreneurial question.

p33

- How could I do this differently; how could I totally change my experience of this business?

p34

- with growth, comes change

- most businesses are operated according to what the owner wants as opposed to what the business needs

p35

- the owner and the business are one and the same thing; if you removed the owner from an infancy business, there would be no business left

- if you have a good business it is inevitable you will get to a point where there’s more work than you can possibly get done

- you realize your business has become your boss

p38

- the technician turned business owner has a focus upside down; they see the world from the bottom up rather than from the top down; they have a tactical view instead of a strategic view; you only see the work that has to get done, and (wrongly) immediately jump in to do it.

p39

- if you want to work in a business, get a job in someone else’s, instead of your own, because while you’re doing all the work, there’s something much more important that isn’t getting done. It’s the work you’re not doing, the strategic work. The entrepreneurial work, that will lead the business forward.

- The technician avoids the challenge of learning how to grow a business. To be a great technician is insufficient to the task of building a great small business. Being consumed by the tactical work of the firm leads only to a complicated, frustrating and demeaning job.

p40

- In a business like that what your customers are buying is not your business’s ability to give them what they want but your ability to give them what they want – that’s what’s wrong with it

- If a business depends on you, you don’t own a business – you have a job. And that’s not the purpose of going into business

p41

- the purpose of going into business is to get free of a job so you can create jobs for other people.

o To expand beyond your existing horizons. So you can invent something that satisfies a need in the marketplace that has never been satisfied before.

- You can’t have it both ways; You can’t ignore the financial accountabilities, the marketing accountabilities, the sales and administrative accountabilities; your future employees’ need for leadership, for purpose, for responsible management, for effective communication, for something more than just a job in which their sole purpose is to support you doing your job. Let alone what your business needs from you if it’s to thrive: that you understand the dynamics of a business – cash flows, growth, customer sensitivity, competitive sensitivity, etc.

- If all you want from a business of your own is the opportunity to do what you did before you started your business, get paid more for it, and have more freedom to come and go, your greed – self indulgence will eventually consume both you and your business.

p50

- When you have a business & it’s going so well that it seems you don’t have time to do everything and you’re going crazy; that no one I swilling to work as hard as you work. That no one has your judgement, or your ability, or your desire, or your interest. That if it’s going to get done right, you’r ethe one who’s going to have to do it. That you are the master juggler of everything so it gets done. That the boss always changes his mind about what needs to be done, and how. It’s that you simply don’t know how to do it any other way.

p64

- the job of the owner: to prepare yourself and your business for growth

- to educate your self sufficiently so that, as your business grows, the business’s foundation and structure can carry the additional weight.

- There is no other choice if your business is to thrive

- It’s up to you to dictate your rate of growth as best you can by understanding the key processes that need to be performed, the key objectives that need to be achieved, the key position you are aiming your business to hold in the marketplace.

- Ask the right questions: Where do I wish to be? When do I wish to be there? How much capital will that take? How many people, doing what work, and how? What technology will be required? How large a space will be needed, at benchmark 1, 2 & 3? What are your contingency plans when you make mistakes?

p65

- plan, envision and articulate what you see in the future for yourself & employees; write it down, clearly, so others can understand it; otherwise you don’t own it. Concretely committed to paper

p71

Technicians perspective Entrepreneurial perspective

What work has to be done How must the business work

Sees the business as a place in which people work to produce inside results for the technician, producing income See the business as a system for producing outside results for the customer, resulting in profits

Starts with the present, then looks forward to an uncertain future with the hope of keeping it much like the present Starts with a well defined future, coming back to the present with the intention of changing it to match the vision

Envisions the business in parts, from which is constructed the whole Envisions the business in its entirety, from which is derived its parts

A fragmented vision of the world An integrated vision of the world

Future is modeled after the present day world Present day world is modeled after his vision

p 108

- Why People Buy. Louis Cheskin. New York: Liveright Publishing Corporation, 1959

p118

- Marketing for Business Growth. Theodore Levitt. New York: McGraw-Hill, 1974

p169

If everybody’s doing everything, then who’s accountable for anything?

p179

- you have to find other people to do the tactical work to free yourself up to do the strategic work

p180

- instead of working IN your business, you need to focus on developing a business that works.

- Regarding employees, how can you give the person responsible for the work the best possible experience.

p181

- only when the (sales) operations manual is complete is an ad for a salesperson run.

- In other words, have the process down before bringing someone in to do it, and hire someone who lacks experience in that area so they learn your method instead of installing that of a competitors.

p185

- it’s critical if you are to begin your business all over again that you’re able to separate yourself from the roles you need to play. To become independent of them, rather than these roles becoming dependent on you.

p187

- the system will become your solution to the problems because of the unpredictability of your people

p191

- the ___ attractively prepared, the service attentive yet unobtrusive.

p195

- to sign and not have done the work is grounds for instant dismissal

p197

- How do you get employees to do what you want?

- create an environment in which ‘doing it’ is more important to your people than not doing it. Where ‘doing it’ well becomes a way of life for them.

p198

- their first day should be unforgettable

p199

- He seemed to be saying that what we were going to talk about was the most important thing on his agenda that day, that discussing my job was more important to him than doing the work that was going on at the time.

- He was hiring me to do something much more important than just work

- The work we do is a reflection of who we are

p200

- There is no such thing as undesirable work; there are only people who see certain kinds of work as undesirable. People who use every excuse in the world to justify why they have to do work they hate to do. People who look upon their work as a punishment for who they are and where they stand in the world, rather than as an opportunity to see themselves as they really are.

- We give everyone who comes to work at the hotel an opportunity to make a choice. Not after they’ve done the work, but before.

p201

- make sure they understand the idea behind the work they’re being asked to do.

- There was an idea behind the work that was more important than the work itself.

- The customer is not always right, but whether he is or not, it is our job to make him feel that way.

- Everyone who works here is expected to work toward being the best he can possibly at the tasks he’s accountable for. If he’s unwilling to act like it, he should leave.

- Business is a place where everything we know how to do is tested by what we don’t know how to do, and that the conflict between the 2 is what creates growth, what creates meaning.

- The true combat in a practice hall is between the people within ourselves.

p202

- the degree to which they buy into your game doesn’t depend on them but on how well you communicate the game to them – at the outset of your relationship, not after.

p204

The Rules of the Game

p206

- most people today are not getting what they want. Not from their jobs, not from their families, not from their religion, not from their government, and, most important, not from themselves.

p209

- the hiring process

p215

- You don’t need professional managers to manage to your standards; all you need are people who wish to learn how to manage to them; people who are as personally committed to those standards as you are.

- Managers manage the system by which your business achieves its objectives; the system produces the results; your people manage the system

- The Hierarchy of systems in your business:

1) How We Do It Here

2) How We Recruit, Hire, and Train People to Do It Here

3) How We Manage It Here

4) How We Change It Here

p216

- if is the system, not only the people, that will differentiate your business from everyone else’s.

p218

- when it comes to marketing, what you want is unimportant;

- it’s what your customer wants that matters

p222

- Demographics & psychographics – 2 pillars of a successful marketing program

- Construct a Prototype to satisfy his unconscious needs

p223

- shade of ____ has an extraordinarily high appeal and preference to ____’s Central Demographic Model

- the colour _____’s Central Demographic Model consumer know it can depend on

p225

- ‘find a need and fill it is’ inaccurate; it should say “Find a perceived need and fill it”

- because if your customer doesn’t perceive he needs something, he doesn’t, even if he actually does.

- If you know his demographics, you can understand what those perceptions are, and then figure out what you must do to satisfy them & the expectations they produce

p231

- there isn’t a function or position within the company that is free of asking marketing questions: “What must our business be in the mind of our customers in order for them to choose us over everyone else?”

- it is how well integrated that process is, how totally and completely connected each part of the process appears in relation to the rest of the process, that will determine how successful you are at getting them to come back for more.

p232

- the customer you’ve got is one hell of a lot less expensive to sell to than the customer you don’t have yet.

p238

- the purpose of a system: to free you to do the things you want to do

p239

- structure is what you do. Substance is how you do it

p251

- every written or verbal communication with anyone who comes into contact with your business is a soft system.

p257

- Keep the curtain up

- The curtain is your comfort zone;

- Your comfort zone has been the false mask you put on because it was safe when your spirit was not.

- The curtain you have placed in front of your face and through which you view the world.

- The tight little cozy planet on which you have lived, knowing all the places to hide

- Your comfort zone has seized you before, and it can seize you again, when you’re least prepared for it, because it knows what it means to you. Because it know how much you want to be comfortable

p258

- Comfort overtakes us all when we’re least prepared for it. Comfort makes cowards of us all