sduchemin

[sduchemin]

Quality is an intangible value intrinsically tied to the strategy of the business.

Investments in Quality should be compatible with the expectation of the customer.

An example is a car buyer asked to pay for the price of a Corvette when all he expects is a Toyota Camry. On the other hand, this same buyer would certainly not accept to pay for a Camry to receive a Kia Rio from the car dealer.

Because Quality is tied to the strategy of the business towards the expectation of the customer, it acts as an umbrella for all the investments that reinforce the value delivered versus expectations.

However, many companies just don’t know who their REAL customer is and fail to match the customer’s expectations.

Many contracts are signed at the corporate level, when a corporate buyer finally accepts a proposal that reflects his corporate need of receiving more while paying less.

When the Product or service is finally delivered, it should also match the expectation of the REAL customer that receives it.

In large corporations, this REAL customer is at the shop floor. His complains are always critical and can undermine a business in the medium to long term, especially when there are competitors.

At the bottom line, Investments in Quality (Safety, Environment, Social, CI, Product and Process development, Production Control) should target the invoicing of a Camry to the buyer, producing at the cost of a Kia Rio, and matching the expectations from the operator to receive a Camry.

If the business can deliver a Corvette instead of a Camry, that’s nice, but unnecessary since it will certainly represent a loss for the company and will also be well beyond the buyer AND the operator’s expectations.

Then they can both ask for a discount...

[sduchemin]

Automation starts with a process flow.

In his Book called "History of Gold and Money", Claude Villar explains how the world production of Gold jumped from a mere 1.5 tons a year to 250 equivalent tons a year (Silver + gold), just a few decades after the discovery of the Americas. This sudden influx of wealth in Europe led to a demand of industrial goods that were mainly produced in Asia at that time. The discovery of the Americas was a direct result of trying to find another route, safer, to get products manufactured in China, Japan and India, the major industrial superpowers at that time. But the economy generated by this new gold was so extraodinary that it financed the industrial revolution in Europe, just to supply the local surge in demand. 300 years later, the production went back to China, where it started in the first place. Now, with automation, it returns to Europe and especially to the USA. With a workd demand at its peak, it is time for AI, robots and automation to bring industry back to the owners of the Capital.

The Article below illustrates some of the challenges we may face ahead. Automation is key to build the vision of an industrial “reshoring”.

But automation starts with a Process Flow.

MapOmega can quickly help your support teams building standard process maps, scalable as web-database from one single work location to an entire corporation.

Stéphane Duchemin - Managing Director

San Francisco, CA 

www.mapomega.com

http://futurism.com/un-report-robots-will-replace-two-thirds-of-all-workers-in-the-developing-world/

[sduchemin]

Never Bluff the Customer

On a frozen morning of November 2007 I was driving from Detroit to Indianapolis without any idea that a couple of hours later I would be part of the shortest, most brutal and ruthless business meeting of my entire professional life. And most suprisingly: Without saying a word, I would exit winner from it. As a takeaway, I would bring back home that same afternoon my most pungent bussiness lesson so far: never, ever, bluff the customer… Back In 2007 I was the lead Program Manager for a large Tier 2 automotive supplier located in South America. We were trying to establish a footprint in North America. Our Customers were Automakers such as Ford, GM, Chrysler and large Tier 1 Suppliers such as Arvin Meritor, TRW, Allison Transmissions located in greater Detroit, Chicago, Indianapolis. Our marketing strategy to open these new Markets was brute force: we were a team of two, working closely together. A senior salesman responsible for opening doors and seting up technical meetings, and I, the Engineer responsible to sell our capabilities to the customer’s multifunctional technical team, and subsequently develop the projects when, and if they were sold. Typically, the sequence would involve our Senior salesman visiting all the customers every day, following an established route in the Detroit Area, until someone, after insisting for weeks or even months, would eventually open a door, allowing us to set up a technical meeting with the parties involved. When finally we could met with the Customer’s multifunctional team, I would present our plant’s capabilities in South America, and most importantly, I would clarify highly technical questions. The production Manager was interested in volumes, the Quality manager in fall-out rates and local technical assistance; the logistic manager was interested in number of days in the pipeline at sea and inventory volumes by locations; the Commercial manager was mostly interested in our financial health as a company; the Buyer was mostly interested in price structure, and so on. All of them were also interested in the smallest details of our production processes, equipment capabilities and Quality Standards. All these informations would have to be disclosed and proved with facts and references. “Show it” was the moto. Below, I choose to describe the long, highly technical and boring process of developing such Projects, just to put them into context for their complexity of development, added to the difficulties of integrating different business cultures in different countries. If this is too boring, please scroll down to the final part at Authorization for Production. As the lead program manager, I had full access to all these major interfaces within our plant. I could handle all these questions and show some confidence to the Customer’s multifunctional team. If the multifunctional team was convinced of our capabilities to develop the product and deliver the volumes within a timeframe, they would tipically travel to our Plant in South America to validade our references. They would send a team of three: the buyer, a process auditor and a production manager. I would closely follow them on their trip to South America, as a host and guide inside our plant and production processes. Once our capabilities were validated on the field, the multifunctional teams would start working together, establishing one point of contact on each side. I would be one of these, and a colleague from the customer’s side would be the other point of contact. After developing more than 120 of these Projects, almost 20 of them Internationals, I made very good friends in the process, working together very closely. Many times, after long hours at work, we would have some beers in the evening at a local bar. Some of these good friends may even be reading this! A typical Program, an umbrella Project fro several small Projects, would involve building and validating the production of several engineered Parts, the small Projects, starting from a 3D CAD Model. A good contract was always made of a few good and profitable parts, together with a bunch of dificult parts that no one would consider producing individually. We would call this mix of good and bad parts a “package”, and we needed to be smart enough to not bring to the package too many “bad” projects that could jeopardize the profitability of the Program. Once critically analysed and approved as fit for production, we would start building a first prototype with non definitive tools, allowing quick adjusts if needed, just to validate the part at the customer’s production line. When validated, a first batch of parts would be produced using brand new definitive tools, much more expensive, that would last for the entire life of the Project, typically 3-5 years. This first batch of parts would then validate the supplier’s production process at the customer’s production line and authorize the parts for production.

Authorization for Production

The “authorization of production” was a document called PPAP (Production Part Approval Process) signed by the buyer and ALL the technical multifunctional team at the Customer, after validated at all the different labs and at their production line. All all them were part of the sequence of approval.

A typical Program would last 6 to 8 months, from the first comercial handshake to the PPAP approval of all parts. Once issued, the PPAP document was a legal document, establishing for both parties the terms for deliveries and payments, together with volumes and technical specifications.

The cost is extremely elevated, involving men hours of large highly qualified multifuncional teams, expensive tools and international travel costs. When a Program was launched, big decisions on both side were already taken long before.

Then was I, driving from Detroit to Indianapolis on that frozen November morning of 2007, believing that finally, I would receive the long awaited PPAP approval from the hands of the Buyer.

The Customer’s facility was like a Military Base. One of its largest customer was the US Army, to which it supplied transmissions parts to most of the tanks and military vehicles in use at that time in the Irak war. Maximum clearance was needed to enter the facility, and the buyer was already waiting for me at the lobby, looking like an Army Captain in grey suit and tie, impeccably ironed.

We walked to a small meeting room, where a man was sit. I never saw that man before, and I wasn’t sure what he was doing there. He looked surprised as well to see me there and a little puzzled.

The buyer sat between us and right away, before I could pull out my business cards, he started talking: “Gentleman good morning, thank you for coming here. I asked you to come to communicate that, starting from January first, we no longer receive the parts numbers from the model Xyz transmission coming from Canada. Our new supplier will start sendind them from Brazil.”

A profound silence felt suddenly. Then, the buyer asked:

“Any questions?”

I realized the mysterious gentleman was my competition, that he was now starring at me, tragically trying to understand that he had just lost a $15 Million/year business in less than 20 seconds.

Confused, he asked: “and the parts in the pipeline, and the tools, what happens whith the tools?”

“Don’t worry, our legal teams will talk to each other”.

And that was it. A $15Million/year business was transfered from Canada to Brazil, and neither sides had saw it coming that way. The customer was in charge all the time. These were his parts, this was his game.

Brutally, I realized that an entire production line in Canada would shut down in a month, people would loose their jobs. I realized this was no win-win game, as I though so far, because there was a looser.

The Canadian competitor lost that first business to us and then a couple of others before reacting. At that time they though that they could raise prices, even without being able to justify them and in the middle of poor deliveries and Quality. They trully believed the customer was unable to develop another source.

They bluffed, and they lost.

And I learned a true business lesson:

Never, ever, bluff your customer.

Six months later we ended our Detroit Campaign with $55Millions/ year in New Businesses.

I was really feeling great.

Stéphane Duchemin

MapOmega, Inc.

www.mapomega.com

San Francisco, CA

About MapOmega:

We offer innovative solutions to deliver engineering specifications to Industrial/Operational processes.

Ask us for more information at

sduchemin@mapomega.com

[sduchemin]

Communication is key to remove silos.

I am not an expert in communication, but just like most people familiar with business culture in large organizations, I know the frustrations of dealing with internal silos.

We also know that  silos and a lack of communication are entangled together, but most of us just don’t know which one results from the other.

Then, instead of focusing on silos, I’ll prefer to focus on communication, mostly to share some of my experience.

Some years ago, I tragically saw the directs results of a critical lack of communication. Two different areas within a large Steel Mill were working independently on their own activities, sharing just one interface. Day and night, shift after shift, 365 days a year, the melt shop area would deliver to the slag area large pots of extremely hot slag for disposal. Both areas were doing their best at what they were suposed to do. One area was delivering in a timely manner its hot materials for disposal, and the other area was disposing these materials in a timely manner. Shift after shift, during months, both areas were doing their best at what they were supposed to do, no doubt about it.

Then, one night, there was an explosion.

The warehouse where the hot materials were disposed blew up, injuring the Front Loader Operator and burning 50% of his body. He survived by miracle after a year of painful recovery.

What went wrong?

In that particular shift, the hot material delivered for disposal was a different material than the regular one, and of a special type with a rare occurence during a year of production. It should have been disposed following a different procedure than the one used for the regular material. However, there was no way to communicate between the areas, so one area would have warned the other about this “different” material. The Front Loader Operator was “supposed” to visually know the difference between both materials, and obviously he wasn’t.

I could write tons of these “assumptions” that went wrong, I choose this particular one to describe the tragedy of miscommunication. 

This accident also examplify a key point for my arguments. It is too easy to think that communication by itself is the solution, when clearly it is not. Both areas could have had daily meeting for years, and even then, the accident would have happened. When people start to gather in meetings, phone conferences, or exchanging long emails, they may feel they are solving problems allowing the discussions to flow. It is not entirely true, they may be just wasting their time and locking themshelves tighter within their own silos.

Then, communication by itself may be a source of waste, but still, communication is key.

Purpose-driven Communication

The kind of communication I am writing about is a purpose-driven communication. The accident as described above is an exemple of miscommunication that could have been avoided with a purpose-driven communication.

The flow of information always follows the flow of materials. It is like the plot of a story being told, shift after shift, over and over again. At each step of the story, all the organization needs to provide support and knowledge to perform the actions in the most safely manner and in the most productive and efficient manner. While Production/ Operation is responsible for the execution of the flow, all supporting areas are responsible to help it deliver. Production is like the surgeon in the surgical room, while supporting areas are the team of nurses and physicians helping the surgeon to focus on the surgical procedure.

Purpose-driven communication allows to ask, record, and answer key questions at each step of the process: what can go wrong and where it can go wrong? what is the criticity? how can the risk be mitigated? How can the flow be improved? How safety or environment can be improved?  How the lead time can be reduced? and so on.

Once you start following the flow of materials, each step of this flow is an oportunity for improvement through a well targeted purpose-driven communication between the parties involved in the execution of the flow.

Then, silos start to open and fall apart, because most of the employees of an organization wants to help and do their best. When they don’t understand the overall CONTEXT, they keep trying to do their best within a limited scope, their own context they can understand. 

These are the Silos.

Purpose-driven communication is lead by the upper administration, making sure from top-down that every employee is adding value to the flows of materials, that ultimately generate revenues, profits, margins and individual dreams.

Stéphane Duchemin

MapOmega, Inc.

MapOmega is an innovative and powerful tool to map the overall context and help locating the workstations and the routes of materials. It helps designing the flow of materials and is a critical tool to unleash purpose-driven communication.

 There are tools readily available Online or Printed (MegaMap above) to Communicate, Plan, Manage the flows of materials and overall context of the organization. Ask for more information or schedule a Webex presentation  at info@mapomega.com

www.mapomega.com 

[sduchemin]

This news affirms the conclusions of a study conducted by the market research firm, Metra Martech, “Positive Impact of Industrial Robots on Employment,” that there will be growth in robot use over the next five years resulting in the creation of one million high-quality jobs around the world.  “Robots, in addition to the auto industry, will help to create jobs in some of the most critical industries of this century: consumer electronics, food, solar & wind power, and advanced battery manufacturing to name just a few.”

“The rapid rise of robot use in the United States is impressive for several reasons,” said Jeff Burnstein, President of Robotic Industries Association.

The industry’s largest user, the automotive industry, has accelerated its purchases of robots and at the same time created more jobs in the manufacturing process.

There has been strong growth in the use of robots in general industry, as robots further penetrate industries such as life sciences, warehousing, and semiconductor and electronics manufacturing.

The use of robots is rising in small and medium sized companies who see robotics as a key factor in improving productivity and product quality in order to stay globally competitive. We expect these trends to continue well into the future.

According to the International Federation of Robotics, car manufacturers and component suppliers will continue to be heavy users of robots. In addition, more and more new companies specialized in electric or autonomous vehicles that are starting up in the United States and are in need of modern and efficient production facilities. The electronics industry continues to be the fastest-growing emerging industry for industrial robots in the United States (2014-2015 = +41%). Increasing numbers of orders can also be expected from the metals and machinery industry, the rubber and plastics industry, the pharmaceutical and cosmetics industry, and the food and beverage industry.

[sduchemin]

Why Finances and Quality should be best friends.

A process is a sequence of steps. It is designed to add value to raw materials, the inputs of the process, up to their maximum value as finished products, the outputs of the process. Tangible or intangible, an output incorporates all the value created at each step minus all the costs needed to run that step. In a production line, the first conclusion we can deliver so far is that a product rejected (not sellable) at the end of the process impacts much more on the cost of production than a product rejected at the beginning of a process. It also removes more time available on the process to produce another sellable part. A good example to picture the statement above comes from a large motorcycle manufacturer I visited as a supplier, located in Manaus, right on the middle of the rain forrest in Brazil. This Japanese corporation invited several key partners to visit their impressive facility and tour their production processes. Located in a free governmental trade zone in the middle of the rain forrest, this state of the art motorcycle facility was designed to assemble up to one million motorcycles a year. Every single part would come by boat or air, since there were no roads connecting Manaus to the rest of the world. Arriving by air, we would fly hours above a green sea of untouched rain forest, until all of a sudden, Manaus would appear as a tiny and fragile city of one million inhabitants locked in the middle of a humid and omnipresent rain forest. Something like another planet. The head of the motorbike plant was clear in its message: "We have designed a plant to produce one million motorcycles, but we can produce only 850 thousand, even when we have a market of more than a million units a year. Guess what? Who is to fault? That's right my dear suppliers, you are to fault. The bad quality of your parts are impacting our sales." A couple of weeks later, these levels were down from 15% to less than 5%, and six month later they were producing one million motorcycles a year, one every 14 seconds at their 3 production lines. A better Quality, that the customer was willing to pay for, was able to transform just another business to a good business for everyone. At the end, prices were adjusted between us and the customer and profits skyrocketed. Another example in services, where an equipment more costly to operate will not necessarily multiply production outputs (revenues) in the same proportion than it can multiply costs, generating losses at the steps it operates in the process. Similarly, an under-designed piece of equipment will not necessarily maintain production outputs while decreasing costs of operation, and may generates losses of production (revenues) that will offset savings in operations. Then, in services or in production, losses come always from the steps that remove time available to produce the planned output or produce the same output at an unplanned cost. The second conclusion we can draw is that revenues are generated in steps, performed along a process. Also, losses are generated when something goes wrong at one of these steps. The activity designed at a specific step to be the most efficient possible is substituted, for some reason, by a similar activity, but inefficient compared to the original one. Inefficient means that it needs more resources to deliver the same or lesser outputs. The third conclusion we can draw is trivial, since we need three elements to manage the building of the financial plan: the design of an efficient process, the most reliable operation of this process and the capacity to evaluate deviations from the efficient planned design compared to the current operation. And that's why Finances and Quality should be best friends: instead of waiting for the end of the month to discover how efficient Operations was able to deliver the outputs of the original design of the process, why not evaluate it shift-by-shift? And then, small deviations can be addressed locally and larger deviations can be addressed by all the resources needed within the company to minimize the consequences on the financial plan or fix them for good at their earlier stages. Quality is the business function that works independently upon the most efficient design of the process, together with Operations that executes this design in production. Together, Quality and Operation should work to deliver the sales plan to Finance, building the revenues as agreed by all parties. In companies where the Quality function is nonexistent or at least not incorporated in Production, since an independent function would work better, the cost of deviations from the most efficient production design can reach 30%. This cost is more than enough to drive Finances mad, especially when significant non-planned events appear out of nothing at the end of the month. Teaming together, Engineering, Production, Quality and Finances are winners, but when one of them is absent, they all loose. Stéphane Duchemin sduchemin@mapomega.com MapOmega, Inc. www.mapomega.com

[sduchemin]

Kaizen & Six Sigma DMAIC

A while ago I attended a conference on Continuous Improvement. During two days, different speakers would talk about their strategies to improve the business processes within their organizations, mostly global corporations. Some of them were Government agencies, providing general public services. One of the private corporations was Motorola, which I payed attention carefully due to the fact that it is known to be the creator of the Six Sigma methodology. Later, GE spread the methodology and made it famous worldwide. Jack Welch became the messiah of Six Sigma, transforming the creation of Motorola into the backbone for the culture of continuous improvement he wanted to foster as the CEO of GE. At the end of the 1990s and beginning of 2000s, the Six Sigma methodology was queen, Black Belts were superheroes and the future in the industry was to chase relentlessly the Six Sigma capability in all processes.

What was easily forgotten at that time was that Six Sigma was rapidly substituting Kaizen. Kaizen events, during the 1990s played a huge role in continuous improvement, but after a while, people started to understand that their impact were limited in time. Three to six months after their implementation, the results would fade away and ultimately disappear. Kaizen were good at redesigning fast an entire process to the better but were inefficient at maintaining its immediate results in time.

As soon as Six Sigma started to show its results, being able to measure the impacts of its improvements along months and years, mosts of the kaizen teams became Six Sigma teams of Yellow Belts, Green Belts and Black Belts.

And to my knowledge so far, Kaizen became a thing from the past.

Fast forward to 2013, and I sit in front of the Motorola guy, a Six Sigma Black Belt, talking for an hour about the many Kaizen events deployed at Motorola during 2012, and their positive impact within the organization.

A little puzzled, I ask the first question at the Q&A final section: _ My name is Stéphane, I am a Six Sigma Black Belt and have been deploying Six Sigma Projects during almost my entire professional life, as an engineer, a manager and a director for Quality. It’s like my mind is all formatted within the DMAIC methodology. Then comes you, the Motorola guy, and spend one hour talking about Kaizen events that I thought until now were over. A thing of the past. So what happened to the Six Sigma Projects at Motorola, the creator of Six Sigma?

The Motorola manager opens a huge smile and answers in a paused manner: _ Continuous improvement at Motorola is entirely framed within a Six Sigma methodology. However, things have changed fast within the industry, since the 2000s. Now, the customers want fast results, no one wants to wait six months to start to see results. But a good Six Sigma Project, with significant financial impacts, lasts from six to twelve months to deploy, and no one wants to wait that long. So we figured out that Kaizen was the perfect tool to deliver fast results, measurables, that could be sold to the customer as tangible improvements. Then, a Six Sigma Project becomes the overall strategy, a long term approach to reach a clear and defined objective. Kaizen is a step towards this objective, an efficient tool to deliver a step within a strategy. And then it works for everyone, the Customers and Motorola.

And that was it, they figured out how to make it happens for good, unleashing all the power of both worlds, to the benefit of all parties.

And that is the essence of continuous improvement: to deploy solutions that have a significant positive impact on the expectation of all parties in the business: customers, employees, stockholders.

Stéphane Duchemin sduchemin@mapomega.com www.mapomega.com

[sduchemin]

Labor Omnia Vincit Improbus