Tag Archives: manufacturing

Great #design brings great results….#engineering

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quashqai Recently released results from Nissan the Japanese automotive manufacturer illustrate how good product design leads to improved financial returns.

Nissan’s Net Profit was up a whopping 7% at 341.43 billion Yen and Turnover was also up 7.2% at 341.43 billion Yen.

This was largely based on sales of the distinctive Quashqai SUV in Europe.

Quashqai’s design team was  headed up by Stephane Schwartz who conceived the distinctive ‘bone line’ styling whilst thinking about Lean & Athletic images at his home in London. Nissan’s European design studio was put to work on the Quashqai at its base in Paddington London and the results are reflected in Nissan’s financial performance despite a strong Yen.

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Candid Camera………….#pmot #innovation

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1st digital camera

1st Digital Camera

The recent news that Eastman-Kodak had filed for Chapter 11 bankruptcy created much derision around the fact that Kodak invented the digital camera back in 1975 but failed to exploit this achievement.

Of course hindsight is a wonderful thing & perhaps we should consider that back in 1975 Kodak had 90% market share of the conventional film market & the vast expansion of digital technology was difficult if not impossible to predict. In 1975 only a handful of hobbyists had a computer at home & most of these were incapable of displaying a decent colour image.

Innovation isn’t easy. Companies have to decide very carefully what to invest in & can spend many millions backing the wrong “horse”

One way to make this process easier is to capture the “Voice of the Customer” by carrying out carefully worded customer surveys, engaging the customer in online conversations via Social Media, having effective call centers  & by analysing customer return data. All of these activities can help organisations predict market trends.

The closer the supplier can get to its customers the better the chance of  Innovation success.

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project managers and business consultants

What recession ??? #pmot #entrepreneur

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This week Jaguar Land Rover announced a multi – billion pound investment program which will generate over one thousand new jobs in the West Midlands – a fantastic example of how a company can thrive in a recession when it focuses on producing a quality product range which exceeds customer expectations.

Here is just a short list of some major companies which not only started in a recession (or even a depression) but went on to grow into some of the biggest and most successful companies in he world today.

growthGeneral Electric – 1873

Disney – 1924

Hewlett Packard – 1939

Burger King – 1957

Microsoft – 1975

So here are some thoughts on growth in the current recession:-

  • Business Case – if the business case is sound and has been rigorously reviewed – forget the recession. Have the courage to invest in your convictions.
  • Ignore the herd – just because the majority of companies are acting like rabbits caught in the headlights doesn’t mean that yours has to.
  • Crush Competitors – that’s right, take the opportunity to mop up your timid competitors markets.
  • Eliminate waste – apply LEAN principles to maintain the competitive edge.
  • Ensure Quality – apply 6 Sigma t0 minimize defects & maximise yields.
  • Employ Interims – If you are cautious about taking on full time employees make use of highly qualified contractors available at short notice to meet your immediate business needs.

Fortune favours the brave !

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Unemployment – #Innovation is the answer #pmot

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UnemployedIn the U.K today we slumped to another level of misery with unemployment hitting 2.57 million, the highest for 17 years. What a tragedy especially for our youth with levels above 21% for 16 – 24 year olds.

So what’s the answer – there is no magic solution to the world economic crises but how about some of the following:-

  • less focus on “the markets”, our repeated emphasis on stock indices performance has led to short terminism in the extreme.
  • Stop bailing out failing financial institutions. Trillions of pounds of taxpayers money on both sides of the Atlantic has been thrown away propping up banks which have made disastrous risky investments at our expense.
  • Using the money saved from the above embark on a major series of public works, transport, housing, digital technology and green energy solutions should be at the forefront.
  • Set up a state bank to invest in small businesses. Small Businesses employ around 60% of the private sector workforce & are desperate for funds to enable growth.
  • Set up more Technology parks. Cambridge is a fantastic example of how successful this strategy has been over the last 20 years.
  • Encourage start-ups in the North by offering financial incentives to do so. Far too much of our industry is currently situated in the overcrowded South East. There is a wealth of untapped talent in the North which is currently going to waste & plenty brownfield sites to build on. The developments at Salford Quays including Media City is a great example of what can be done when there is a will to do it.

These are just some ideas how we can stimulate the economy by investing in Innovation & Technology instead of continuing to bail out banks  pouring more valuable resources down the drain.
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Casino Capitalism….#pmot…#biz..#innovation

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traderWe have seen trillions wiped off stock markets worldwide, the FTSE 100 has lost over 10% of it’s value in the last week alone & our TV screens have been filled with hysterical traders and concerned politicians.

So does it really matter, in the long term probably not, but if you were planning on retiring soon and have an equities based pension scheme you may well have to think about postponing your retirement.

The markets have become the biggest casino on the planet, where billions are traded on market fluctuations to generate financial gain for wealthy funds. The problem is that massive losses can also be generated especially in times (like now) of great volatility.

It is almost as if Government policies are primarily based on satisfying short term targets of financial speculators.

Over the last 30 years we have seen increasing numbers of large corporations listed on the Stock Market. The benefits of this are increased transparency and greater share ownership but the downside is that company boards are increasingly focused on short term share performance rather than long term strategic growth. They are also more vulnerable to deselection which increases their focus on knee jerk reaction to stock market fluctuations.

So how do we escape from all this madness ?

Here are a few suggestions which may help:-

1) Corporations should seriously consider de-listing from publicly listed stock exchanges & revert to private Limited Company status. Directors will then be able to take a more objective long term view divorced from the daily vagaries of the markets.

2) They should follow the example of German organizations and involve workers representatives at board level, increasing participation and integration.

3) The only way to pay down debt is to generate growth; Governments need to think beyond printing money and subsidizing banks. Innovation in manufacturing and services should be strongly encouraged.

4) Failing corporations, whether banks or otherwise, must be allowed to fall. The risks of failing institutions should not be born by the taxpayer.

5) A state bank should be established to act in direct competition with the private sector so that essential Capital flows can be maintained.

6) Government (NOT essential public services) must be streamlined and taxes reduced. For too long those in business & manufacturing have subsidised those working for the state who provide no added value whatsoever.

We need a radical rethink if we want to escape the madness of Casino Capitalism.

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Lost opportunity cost…..#pmot…#in

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Bizplan03

In the last post we discussed risk aversion. One of the pitfalls of being too risk averse is lost opportunity cost.

In New Product Development Project Managers constantly balance time to market with product quality, resource management, project costs & a host of other competing factors.

In an effort to develop the perfect product with maximum process capability and meeting 100% customer satisfaction the real cost of lost opportunity is often missed.

Consider a product which on release will generate, on average,  $100,000 profit a month for 12 months. If the product release is delayed by 1 month the lost opportunity cost can be estimated as $100,000. What should be  emphasised is that this amount will NEVER be recovered. If the product lifecycle is estimated as being 12 months depending on the competition then releasing the product 1 month late reduces the lifecycle to 11 months.

If that lost $100,000 was invested at a compound rate of 5% per year over ten years it would be worth $163,000 !

So here are some tips to minimize lost opportunity cost:-

1) Invest in the project at the front end, providing ample resource and support.

2) Fix the product spec before the end of the design phase.

3) 100% perfection is great but 95% is normally good enough for most customers.

4) Make it easy for engineers by setting SMART (Specific, Measurable, Aggressive, Realistic, Timely) targets.

5) Publicise Project Milestone targets.

6) Communicate Lost Opportunity Costs.

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Fix the system not the individual…#pmot…#in

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systems-thinkingOn a recent business trip to Geneva I flew from Leeds Bradford Airport in the North of England. I checked through on time and headed for the gate to be met by a scene of organised chaos. The queue was very long and heaving with Schoolkids on exchange visits, holidaymakers and business people. At the very end of this long queue we were given a tray into which we had to load our laptops, keys, belts etc as part of the security screening process. This was undoubtedly the bottleneck and by the time I got through security to the Gate I was informed by an attendant that I may well have missed the flight. I was then subjected to admonishment, had I not heard the attendants calling people through for the Geneva flight – “No” , I hadn’t heard anything in melee – anyway to cut a long story short I caught my flight but not without a lot of hassle and stress.

Contrast this experience with the return journey – same plane, same loading, same mixture of people.

Here, at Geneva, the queuing system was completely different. Rather than joining  a long “snake” we joined the end of two queues where we were given a tray on a conveyor belt at the START of the queue. This gave us plenty time to put all our valuables into the tray before we reached the end of the queue and the X-ray machine. Consequenly there was no rush or panic, we all got through in plenty time & enjoyed a less stressful experience.

The difference was one of Systems Thinking. The system at Geneva was designed to speed the security process, eliminate bottlenecks and make thing easy for the customer. The system at Leeds-Bradford did the opposite.

If we employ Systems Thinking to our Business Processes, adopting the spirit of Kaizen, we will encourage the smooth flow of people and materials to aid maximum efficiency and process capability. If we ignore the system and blame the individual we will never achieve maximum efficiency & are doomed to fail.

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Should have gone to Spec wavers..#pmot #in

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product specHow many times have you worked on projects where the product spec is not defined?

This leads to all sorts of issues as the customer tweaks the product spec and the designer responds accordingly, trying to keep the customer happy but at the same time disappointing her because the timescale keeps getting extended to accommodate the changes.  A vicious circle develops leading to frustration on all sides & a perception of incompetence which can lead to loss of all important business.

This can be fixed by adopting the following practice:-

1)      A milestone MUST be put in the plan, somewhere in the design phase, for product spec sign off by both parties.

2)      It should be clearly communicated and understood that any changes following this milestone will be under change control, approved by Senior Management and will impact the timing plan & probably have a cost impact.

This practice is good for both customer & supplier. It forces the customer to clarify what they want and leaves the supplier with no excuse for not meeting planned deliverables once the spec is fixed.

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“Dee eff emm eee aaay”…? #pmot #in

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DFMEADFMEA or Design Failure Modes Effects Analysis is a Risk Management Tool which is widely used throughout the Automotive Industry.

DFMEA is a Team activity which is led by the Project Manager or Senior Design Engineer.

It involves using a set form & identifying the risks in the project.

Each Risk is called a Failure Mode. Each has an Effect. The Severity of this Effect is assigned a score where 10 is high impact & 1 low impact.

Each Failure Mode also has a Cause which is ranked according to its Occurrence or likelihood between 1 & 10.

Each Failure Mode also has a Current Control and its chance of detection is ranked 10 unlikely to 1 likely.

The product of Severity x Cause x Control gives us a Risk Priority Number or RPN which gives us a measure of the size of the problem and the urgency to address it.

Identifying a Recommended Action for each Failure Mode leads us to rescoring the Occurrence & Detection and subsequently reducing the RPN.

The key to success of DFMEA is not to get too hung up about the scores and to use it as intended, as a comparative tool for Risk Analysis.

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The difference between price & cost…#in..#pmot

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price & cost

How many times have you inherited a project and had major problems with a supplier who was selected because they were cheap !

This perception of “cheap” is normally based purely on price and takes absolutely no account of the total cost of ownership of the product or service.

Selecting suppliers purely on price is never a good idea.

Here are some great tips from Businesslink:-

What you should look for in a supplier

There are a number of key characteristics that you should look for when identifying and short listing possible suppliers. Good suppliers should be able to demonstrate that they can offer you the following benefits.

Quality and reliability

The quality of your supplies needs to be consistent – your customers associate poor quality with you, not your suppliers. Equally, if your supplier lets you down with a late delivery or faulty supplies, you may let your customer down.

Speed and flexibility

Being able to place frequent, small orders lets you avoid tying up too much working capital in stock. Flexible suppliers help you respond quickly to changing customer demands and sudden emergencies.

Value for money

The lowest price is not always the best value for money. If you want reliability and quality from your suppliers, you’ll have to decide how much you’re willing to pay for your supplies and the balance you want to strike between cost, reliability, quality and service.

Strong service and clear communication

You need your suppliers to deliver on time, or to be honest and give you plenty of warning if they can’t. The best suppliers will want to talk with you regularly to find out what needs you have now and how they can serve you better in the future.

Financial security

It’s always worth making sure your supplier has sufficiently strong cashflow to deliver what you want, when you need it. A credit check will help reassure you that they won’t go out of business when you need them most.

Always remember the difference between price & cost

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