Posted by: malstott | July 28, 2017

“Manufacturing Next” – Information Led

Industry 4.0Remember TQC, JIT, Quality Circles, 6 Sigma, Lean? Good stuff all, but during the frenzy of change many dollars were spent, much time was wasted and the return was often suspect. And now we have the latest batch of Good Stuff: Smart Manufacturing, Connected Enterprise, IIoT, Industry 4.0. Does this feel a little like the latest fad? When will the noise stop, the fog burn off and the way forward be clear? Perhaps never and so we can’t wait for full clarity before taking action. We have a mandate to start down the foggy path.

In order to simplify, let’s consider the theme running through each of these new concepts. The theme is “information”. We need information to guide our factories. The more the better. We need to know what is happening on the shop floor, in the supply chain, through our quality systems and at the financial level. We need this information available to us in a digestible form. Today we have data coming from many sources. Data is being generated faster and faster with 90% of all the data on earth generated in the last 2 years. Thankfully, it is getting cheaper to store and successfully analyze this information through cloud based analytics. If we are lucky we can look at much of our data through the lens of an ERP system. Perhaps some of the data comes through a data warehouse and we can query for what we need. But is this Industry 4.0? Are we “connected”? I pose that the answer is “no” but the path is less obfuscated if you keep your eye on the goal.

The following are questions to ask in order to assess your progress on this path and to make forward motion:

  • Are your physical devices connected?  – machines, devices, sensors
  • Are your internal applications connected? – inventory, orders, invoices, AP/AR, quality, process execution
  • Are you connected externally? – suppliers, customers, competition
  • Does the information flowing out of the connections come together in an actionable way? The NSF defines a “cyber-physical system” as one built from, and dependent upon, the seamless integration of computational algorithms and physical components. Industry 4.0 has been defined as the “cyber-physical phase”.
  • Is modeling of alternatives available to you in order to optimize and can you use artificial intelligence to guide and in some cases control the actions taken?
  • Are the actions generated fed back thus creating a closed loop process?

While it is impossible to create this information “machine” overnight, it is possible to generate the blueprint and develop assembly instructions. The benefits of “Manufacturing Next” are numerous but these three jump to the top:

  1. Eliminate Waste – This is the cornerstone of Lean and it is enabled through information. Do you have the right inventory in the pipeline? Are you starting jobs that can be finished without holdup? Are the products you are building in demand and shippable?
  2. Increase Efficiency – Think OEE for the enterprise. If you can measure you can improve and that is true for all steps in an enterprise.
  3. Remain (or become) Competitive – Everybody is doing it. It is enabling companies to get more from their assets, including their people. And it is enabling artificial intelligence and  increased automation which can level the manufacturing playing field. If low cost labor was the ticket to competitive manufacturing battle in the 90’s, smart use of information and automation is the key to the next decade’s competitive battle.

The basic economic resource – the means of production – is no longer capital, nor natural resources, nor labor. It is and will be knowledge.         Peter Drucker

Posted by: malstott | May 18, 2017

My Aristocratic Responsibility

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French Aristocrats, c1774

You might not have acres of land or be of noble birth, but if you have a college degree today you are an aristocrat. We are a privileged, powerful few who rule most of the assets in this country. We have access to jobs and opportunities.  We typically make more money and are in higher positions of power. The top 10% of US earners made more than $133K in 2016. If you look at it in terms of assets, the top 10% own 76% of the wealth in the US. What enables this kind of income? EDUCATION. It is no surprise that families run by adults with college degrees, had a median wealth of $202,000, which is four times that of families headed by someone who only had a high school diploma.

In many cases having a college degree has little to do with our intelligence. It has to do with our privilege passed down from our parents. We were born into wealth and thus we had good nutrition, top notch schooling and then money for college. How is this so different from the aristocratic world of 18th century France? We have what we haven’t altogether earned and are in a position of privilege and power. And we must decide what to do with that power.

I hear protests. “But we have a democratic system that puts the voting power in the hands of the masses.” “Everyone can get an education if they want it enough.” “I had to work very hard to get to where I am.” Yes, yes and yes…but that doesn’t change the weight of the problem. We have a system that is swayed by money and we have such a great societal divide that getting an education isn’t just a struggle, it is an impossible dream for many.

Our privilege puts us in a position to either enable others or to take advantage of our station in life without regard to those around us. We are modern aristocrats. Here are a few thoughts on how to make a difference:

  • Invest in higher education for others. Endow scholarships, vote for bonds for the community colleges, donate your time or money to make higher education more accessible.
  • Invest in the educational structure in your local community. Read to kids. Vote for bond measures to pay teachers more, build more schools, pay for technology. Donate useful equipment to high schools so that they can teach shop classes, programming classes, robot automation classes. Do this even if you don’t have any children.
  • Influence policy in your company, train your people. Train them for the new work. Hire people with aptitude and train them to fix machines, program robots and design IT systems. Don’t stop this if they leave after getting trained. Consider this an investment in the future of the country.
  • Take a risk on building product in the US. Find a partner to work with if you don’t have internal manufacturing. Or, better yet, build your own plant. Figure out how to make the numbers work by building in the right places with the right processes.
  • Encourage your employees to go back to school for more education. Help them with the cost and the time.
  • Embrace a variety of educational backgrounds as you hire. An education in the Navy is valuable. A two year hands-on degree has great practical value.

Purdue University made a bold move recently to buy Kaplan University, an online university that has 15 campuses and learning centers and 32,000 students. Adding this capacity and capability expands the reach of post-secondary education to working adults and others unable to participate in traditional campus study. This decision comes on top of a measured decision to increase enrollment at Purdue while keeping tuition fixed at 2012 levels through the 2018-19 academic year.  This will be a run of six straight years of flat tuition after 36 years of increases. (Full disclosure: I am a Purdue graduate.) I have high respect for these decisions and their aim. This kind of progress and purposeful decision-making will open doors to many more people and will start to make a difference.

It is very difficult to move the needle in the imbalance in wealth and education that we are currently experiencing. But we should be on a mission to try as good aristocrats. We have an obligation.

Training is everything. The peach was once a bitter almond; cauliflower is nothing but cabbage with a college education.
Mark Twain

Posted by: malstott | April 20, 2017

Dear CEO – You Need Operations Help

Image result for image of hikingThe feeling is like climbing up a hill only to realize that the much bigger mountain is up ahead of the rise you just climbed.  You thought that all was well. The engineering team has working prototypes. Sure, they were made in the lab with machined parts and tape and glue, but they work. Customers are anxious to get their hands on units. Investors want to see the numbers. There is pressure to show revenue and to talk through the path to profitability. Reality hits. The questions start to pour in:

  • Who will build in volume? Do we start in China? Can we start locally and move later? Should we build in-house?
  • How much will it cost? Really? That much? Why didn’t I know about those adders?
  • How do they know what to build? Why isn’t our spreadsheet good enough?
  • How do we get our mechanical parts for much less? Tooling cycle times are how long?
  • What are the processes we should use to keep labor costs in check? Oh, we are not designed for automation?
  • How do we ship this product? Will our box withstand global shipment? How do we know?
  • Should we differentiate for different geographies? How many assemblies will that be? How do we structure? What about documentation?
  • Who will service our customers? Can we handle the volume of calls in-house?
  • Where do we hold our inventory? Who will fulfill? Who will export? What are the cost implications?

If these questions are coming up, you should have hired operations expertise already. If they haven’t yet come up, then act now. Ideally, the operations problems are solved in parallel with the design and both sides are influenced by the other. If done in serial there will be some rework. What are the options for a CEO?

  1. Hire a full time operations expert. In order to have the right breath of expertise the hire needs to be hands on and at a high enough level to have experienced all of the key elements of product launch. If this person is your first ops hire it will be a challenge to attract the right person who will remain the right person as you scale. This alternative might be the most expensive but the benefit is that you have a team player on board who is part of the company story and will provide continuity.
  2. Hire a consultant. Bring in someone(s) who has exactly what you need at exactly the right time. If you partner with the right consulting group you will be able to tap into a breadth of experiences and levels and can dial up and down the resources as needed. Ideally there should be a lead person who has the depth and breadth of experience. Bringing in experts will save you more money than you spend. Consider this an investment and an accelerator to volume.
  3. Hire a buyer and manufacturing engineer who have the experience and willingness to wear many hats. Supplement with your own operations leadership or with leadership from your VP of Finance or Engineering. The leadership can’t be taken lightly and you must honestly assess those skills. Don’t kid yourself. Launching a product into a supply chain is complicated and requires time and experience or costly mistakes can be made. You can delay hiring a VP or Director of Operations only if another senior leader has the time, experience and interest to lead. Or you can hire a consultant to act in this interim role.

Warning! Blatant promotion coming:  You should hire me as an operations consultant. I’ve worked in and with many start-up companies. I’ve seen costly mistakes made because the operations tasks were overlooked. I know what to look for and avoid. I would much rather help you avoid than help you fix and clean-up. I am a doer. I like owning things and delivering to the bottom line. I am a firm believer in understanding enough about the problem to ask the right questions. And I can smell discontinuities. I know how to proceed with gnarly tasks because I’ve had the experiences and possess the intuition to make this work instinctual. I know others in the field and can bring in the right person at the right time to solve the problem most effectively. Yes, you should hire me or someone like me if you have started to notice that there is a mountain of work ahead and you don’t have on good hiking shoes!

I don’t spend my time pontificating about high-concept things; I spend my time solving engineering and manufacturing problems.       Elon Musk

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OpsTrak Consulting      925-437-4125

 

Posted by: malstott | March 24, 2017

I Know How it Feels

Council of the Baltic Sea States Summit 2012…when the handshake isn’t returned…when the answers to your questions are directed to the man in the room…when the good point you make is ignored until it is restated by your male peer…when eye contact is not made, invitations are not extended, emails are not returned, smiles are for the wrong reasons, hard work is not rewarded, …

As a woman executive in a technology field I’ve often been asked if it was harder for me to progress through my career as a woman. When I try to think of the big stories, I come up empty-handed. I was not blatantly discriminated against. No boss ever hit on me. I wasn’t asked to get the coffee or clean up the dishes in the break room. I have done well in my career. I started as an engineer and have been at the VP level at several exciting companies. Based on outward signs I’ve “made it”. But there is something not quite right about the journey that I only now am able to articulate and even now it is blurry and inconclusive.

The challenges faced by a woman in business are usually very subtle and thus are often dismissed or minimized. As a 30-year-old manager working with a Korean supplier I was surprised to find that the leaders would only talk with the men on my team. They would not shake hands with me. I had to convey my messages through the guys to get action. It was appalling and disheartening. But hey, this was another country with cultural hang-ups. It wouldn’t happen in the US…. But it did. As I rose through the ranks and engaged with other companies I realized that some men across the table did not make eye contact with me. Perhaps they answered my questions, but the answer was directed at the man in the room. At the end of the meeting there were awkward moments when I stuck my hand out with no response from the other. It was subtle. Maybe no one else saw. But I saw it and felt the impact.

The first reaction to a discriminatory snub is disbelief. That didn’t really happen, did it? I must be imagining. And then you try to write it off. It wasn’t personal. I don’t need to be bitchy about it. And then anger creeps in. What the heck. I was just dissed. Finally, you try to fix it. I’ll be more direct. I’ll call the guy on the phone.  A happy ending to this kind of cycle is when I pull the offender to my side. I show him my capabilities and he comes around. He listens and I’m given respect. Ah, but the energy expended takes a toll.

Next time I’m asked if it was harder for me as a woman I plan to say yes. But the stories aren’t grand and there is nothing obvious about the slightly steeper slope that I had to climb, but it was steeper for many subtle reasons.

I hope you will find some way to break the rules and make a little trouble out there. And I also hope that you will choose to make some of that trouble on behalf of women.”                              Nora Ephron, screenwriter

Posted by: malstott | March 7, 2017

Made in USA: How We Do It Matters

house-of-strawHuff and Puff and Blow that Economy Down…

What is not to like about more US manufacturing? It is important to our economy, to national security and to the individuals needing jobs and purpose. A nation should be able to build the things that it needs. A hollowed out economy that is only exporting services is not a long term play.

But a revolution is not the solution. Shaming companies to come back is also not a simple anecdote. It took us over 20 years to dismantle our manufacturing prowess. We can’t bring it back overnight. Without some planning we will build a house of straw. We will alienate our trading partners. We will bring back jobs that we can’t fill because we don’t have trained workers. We will try to use the same processes and facilities we have always used and the result will be poor quality and expensive product. We will impact our economy because our goods will be more expensive. Finally, retaliation by other countries will slow down the exporting that we do today. The right way to bring back manufacturing is to consider all of the aspects of a strong foundation and to build a house out of brick. What will that entail?

  • Focus – What kind of manufacturing is right for this country? Given our higher standard of living we will not find enough workers for low skill tasks. The best products for re-shoring can be manufactured using automation, are high value or are heavy or bulky. Those kinds of products don’t rely on low wage workers and they cost a lot to move around. If the market is here you can eliminate shipping costs by building here. We also should consider where we can bring a competitive advantage. If we have access to materials and other natural resources, design expertise or automation capability we can do a better job than the competition and build product for the US market and also successfully export. Examples of good products for US manufacturing are appliances, vehicles, expensive electronic devices, machinery, robots and construction materials. It also makes sense to build close to home when a product is difficult to build and contains a lot of intellectual property. The interaction between manufacturing and design engineering is critical during a fast ramp and doing that close to home has time to market advantage. Time is money and fast to market protects IP.
  • Infrastructure – We need better roads and power and better access to human resource. State government officials in some locations are working on this. Kentucky, South Carolina, Tennessee  and Alabama are attracting more than their fair share of new manufacturing jobs because they have favorable policies, strengthening infrastructure and active government programs aimed at attracting companies. Each state needs to craft policies to attract the kind of industry that will be beneficial to the population.
  • Prepare the Workforce – In a 60 Minutes interview Tim Cook, the Apple CEO, said that one of the reasons that Apple needs to build phones in China is that the US doesn’t have a trained manufacturing labor force. The obstacle is not so great. If we package training with job opportunity at a living wage, the workforce will be available. Apple can not afford much labor content with this model but automation is a way around that roadblock. Increased automation will generate the need for other skills that we currently lack in the US. We need more manufacturing savvy engineers. We have the best higher education system in the world and there are many excellent programs that can meet this need. Those programs train engineers for the whole world. We can harness that momentum for our own workforce through part-time, online or even full time degree or certificate programs that are sponsored by companies in need of talent. This is an investment worth making and where some profit should be directed.
  • Government Support – Of course tax reduction is what comes to mind here and perhaps President Trump’s intention to increase the tax burden on companies importing goods will help fund education or infrastructure. But there are other ways our government can have a direct impact on a continuing manufacturing renaissance.
    • Training program sponsorship or tax credits
    • Increased community college support for practical apprenticeship type programs
    • Higher education support in the form of manufacturing and technology research grants
    • State or Federally sponsored manufacturing initiatives used to focus funds and research
    • Increased vigilance for fair trade 
    • Logical and sustainable regulations that solve for both competitiveness and the environment.
  • Leadership and Vision – When I worked with Canon, I was told that Canon just did not understand our actions. HP was making decisions for our stockholders. We were trying to minimize the tax burden and they felt that taxes were a patriotic duty. Losing jobs to China was a defeat and there was much debate prior to any movement of manufacturing. They believed that they could build the product with higher quality and with more process technology and therefore it would ultimately be less expensive. Perhaps we can’t turn public international companies into patriotic entities but with more visionary leadership and more action that drives innovation and competitiveness right here in the US,  companies can find a win for US manufacturing and for stockholders. The win is there. It will take leadership to invest in factories, commit to a plan that isn’t easy to pull off in the short term and then execute with determination.

There is a path to solid manufacturing growth in the US. It isn’t a move back to the 1970’s. We won’t go back to what manufacturing looked like then but neither will the rest of the world. The new era of manufacturing will be lean and automated. It will require an educated workforce and a supportive government. We will need the willpower and the leadership at high levels in government and industry to take a stand and to chart a path to a successful win-win future where the consumer gets a good “Made in the USA” product at a competitive price.

“All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse.”     Benjamin Franklin

Posted by: malstott | December 12, 2016

Audacious Manufacturing

brave

Let’s be Audacious.

  • Smart Manufacturing takes advantage of data to drive processes, designs, build plans and quality checks.
  • Automation lowers costs and increases quality.
  • Additive Manufacturing helps us build product we couldn’t otherwise build and enables fast time to market.
  • Lean Manufacturing optimizes resources, removes waste and increases visibility.

All of this is great stuff. Let’s embrace all and become Audacious Manufacturing. If you are audacious you are bold and daring. Manufacturing is often just the opposite. Manufacturing executives tend to be cautious and careful. We don’t brag. We let the results speak for themselves. Manufacturing people get the job done but we let the marketing people advertise and the sales people sell. It is time for the manufacturing community to be bold and brave and to market and sell what we can bring to the economy and the country. We can compete globally and are doing it in many sectors already.

As a young intern engineer, I modeled transmissions, wrote papers on transportation alternatives and developed engine combustion simulations, but nothing beat the time I spent working in the Pontiac, Michigan plant where GM trucks are built. That drove my decision to take a job in manufacturing after graduation. I love walking through a manufacturing plant where parts are assembled and products are tested and readied for shipment. Cars, computers, storage systems, networking systems, printers, construction materials, medical equipment: I’ve been to these factories around the world and get the same kick each time. Seeing these plants in the USA brings me even more joy but for many more reasons.

Manufacturing strengthens our economy, creates jobs at a faster rate than other sectors and keeps our creative juices flowing for new idea generation. It brings communities together and keeps us ready as a nation to protect our country. Manufacturing uses a broad set of talents and welcomes a diverse population into its employment. It generates supportive industries that supply parts and provide logistics.

If we as a country embrace smart, lean, automated, additive manufacturing and add a dash of audacity, we can indeed strengthen our manufacturing base in the USA. The manufacturing in this audacious new world can be the best internationally. We have the technology, resourcefulness and the capability to do it. We need to come together across party lines, economic strata and geographical areas to drive policy, education and consumer willpower.

Opportunities multiply as they are seized.  

Sun Tzu;  Art of War

 

Posted by: malstott | September 16, 2016

A Wolf Tone in the Workplace

cello1Is a dissonance good or bad? Does it add a richness to the output or does it detract? If you play a stringed instrument you are familiar with the “wolf“. This is an overtone produced when a note is played that matches the natural frequency of the instrument. The wolf is an oscillation that sounds like an animal noise. It is annoying for a cellist or violinist and it is often dealt with using a “wolf eliminator”. If a cello is properly proportioned it will have this problem. It seems that the very best instruments have this characteristic. Many musicians buy eliminators to dampen this noise. But some cellists choose to embrace this flaw and actually write music with the wolf in mind. Naldjorlak I is a piece that capitalizes on the wolf tone. Some cellists work around and with their cello’s wolf tone rather than putting an eliminator on the instrument for fear of dampening the richness of the other tones. Perhaps they have discovered that a little dissonance can be used to advantage.

In our workplaces we often find annoying “characters”. They find a way to stir things up and call to attention all that is wrong. Often they are different from the rest and don’t blend in with the gang. There are several ways to deal with this kind of person and each way has its consequences.

  • Kick ’em to the curb: There is no time for people problems. Teamwork is the highest priority to get the job done. If this is your situation then eliminating the annoyance will optimize the team’s output. You can try to coach and cajole but you will likely not get to a place where this “wolf” is tamed. Dissonance will persist. However, if you eliminate the problem it is likely that you will also eliminate a skill or set of experiences that created some synergy for the team.
  • Ignore and let the organization work it out: Usually the people with the annoying habits or ideas have something to bring to the table or they wouldn’t have been hired. They have deep experiences or unique skills. Perhaps they are jaded and maybe they have some quirks based on that experience but they are tolerated based on what they bring to the team. Letting the organization work it out is a typical management response. The logic is that there is more benefit than harm and everyone is a grown-up. The organization should work out their differences and move on. This response usually results in inefficiency and frustration. In the extreme the result is the loss of good people.
  • Harness the wolf and find synergy: This third alternative creates the most organizational value.  Different styles and personalities will usually bring the best results. Dissonance and disagreement will help deliver a stronger product. However, there is a technique to optimizing the result and the best organizations work to maximize teamwork while maintaining differences.
    • Teach the team about their own and other’s personalities. Techniques such as Meyers Briggs and Strength Based Leadership are often used to help a team figure out how to optimize their own strengths and quirks while working with others.
    • Allow for disagreement, but then insist on a “commit”. While at Sun I worked with a leader who used the phrase, “disagree but commit”. He was tolerant of discussion and disagreement up to a point. Once the decision was made, he insisted on commitment to the decision with no back-channel negatives.
    • Lead through the dissonance. Purposefully designing an organization that has differing views is a way to enhance results but leadership is needed to guide discussions and allow for a reasonable tension without too much delay. A leader who is self-confident and knows how to bring out the best in a group of people is hard to find but once in place this type of person will be a star.

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
― Rob Siltanen

Posted by: malstott | July 25, 2016

Disfluence: Learning is a Mess

Image result for image of writing in finger paintsI always carry a notebook. This has been part of my work life since its inception. I’ve always known that if I write it down in my messy handwriting, I remember it better. Even when I’m told in a meeting “No need to take notes; I’ll send you the PowerPoint”, I still take notes. Sometimes I do it self-consciously since it seems I’m the only one with a pen in the room. But it helps me soak in the information. Now that I understand the concept of Cognitive Disfluence I will pull out my pen with pride. Cognitive Disfluence is a fancy way of saying that you learn more when you interact with what you are trying to learn.

In 2011 a study was done at Princeton. Subjects were asked to read about complicated, fictional biologic taxonomies. One group read in the common Arial font and the second read in Comic Sans MS. The group that read in the more unusual font remembered 14% more. This study has been done in a number of ways and the results are the same. The same concept is true with numbers. If you have to graph the data yourself on a piece of paper, it will stick. If you do the math by hand and not with a calculator, you will remember it better. If you punch in someone’s cell phone number a few times into your phone, you will remember it.

Humans are meant to interact with their surroundings. Our brains are wired to forget the easy stuff and hang on to the stuff we wrestle a bit with. Knowing this can help us absorb the data and information that comes barreling at us day in and day out. Below are some ways to better grab onto what is flowing past.

  • Use the whiteboard: For those of us working in offices whiteboards are ubiquitous. Have you noticed that some people are fast to jump up and use the board and others hang back? Be one of those board doodlers. As a discussion progresses, note the key points. Write down the dates and make a timeline. Assign owners. Draw a picture of how it works or who is connected to whom. If you are the leader of the meeting feel free to hand over the pen to others to pull them in. You will find that the room is more engaged and that the concepts are remembered. You and your team will think about this meeting more than most because the team was actively engaged.
  • Take notes in meetings, during the lecture or sermon, as you read: Keep a notebook close at hand to jot down something that inspires. Draw a picture of the image that comes to mind. Even if you are doodling or writing key thoughts or names, this is enough to engage a different part of your brain and you are more likely to retain what you are hearing.
  • Graph out your expenses or revenue or miles run over time: I’m a big proponent of dashboards in business. These simplify the noisy data and give leaders key performance metrics to be sure that they haven’t lost control. But the very best way to get to this information is by graphing it yourself. Those shop floor charts where the data is added one point at a time (remember TQC?) are the best. Maybe a good combo is to look at and manipulate key pieces of information. If you see the trends going in the wrong direction dig down a level. See what the key contributors are and normalize by doing some math.
  • Write a list of things to do: Lots of us have “to do lists”. Crossing things off feels so good. But maybe the act of writing something down puts it into our heads to complete as well. We think about the task, consider how big the job is, break it down further and actually visualize the act of doing it.
  • Write stuff on sticky notes and move ’em around: A Kanban board or Scrum board is used in businesses to track, prioritize and pull through work. There are tools available to put this online and manipulate virtually but many companies and teams find that a good old fashioned white board with columns and sticky notes work the best. Why? Because you are engaged with the work. You can write on it. Add thoughts and move them around.
  • Argue from another perspective: One of the most interesting “features” of our brains is the tendency to find and stick with a simple frame of understanding. This saves us time. It helps us get through the day. We know how to drive our cars without a lot of brainpower. We can get ready in the morning without being totally awake. We have a perspective on life and we filter everything to comply with that perspective. The downside of this is that we don’t easily learn and change based on new information. We are blind to changes that can be very important in the running of our businesses or families. To shake ourselves out of this rut, try re-framing a situation by taking the other side and arguing it. It is helpful to hire or befriend people who are not going to simply feed you information that you already know or agree with.

The most successful people are ones who are exceptional learners. They digest new information, absorb new insights and aren’t afraid to look beyond their frames of reference. Many of these successful learners try crazy new things just to shake it up. Resolve to get out of your comfort zone and amp up your learning.

Learning is an experience. Everything else is just information.        Albert Einstein

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Marcy Alstott is an Operations and Supply Chain Consultant with diverse product and technology expertise, multinational management credentials and extensive transformation know-how.  

Email: malstott@opstrakconsulting.com

Website: www.opstrakconsulting.com

Posted by: malstott | June 25, 2016

Fair and Good Trade

datsunI made the trade for a Ford Taurus. By then my little red Datsun 210 had traveled from California to New Hampshire. It had carried me through my masters degrees, my early career days, into a marriage and kids. The seat fabric had rotted and split. The paint finish was crackled and faded. A family of mice had decided to store dog food pellets in the fabric roof lining. (We have ever since stored dog food in metal cans!) But this car meant something to me and it was a hard possession to give up. But I needed a car that didn’t slip and slide in the snow and that carried me with a little more dignity to my engineering manager job. So I made the trade. It was fair. It was good.

These days, in the midst of isolationist leanings, there is a great deal of talk about fair trade. The treaties that were enacted over a decade ago are being blamed as the root cause for all of our economic woes and lack of full employment. The US has 14 trade agreements in effect with 20 countries. We are in the process of examining and likely will be rejecting an additional Asia-Pacific trade agreement, known as the Trans-Pacific Partnership (TPP) Agreement and are in negotiations with the EU  regarding the Transatlantic Trade and Investment Partnership (T-TIP). Why are these agreements in place and are they fair and good? 

The argument for international trade agreements is that they reduce barriers to U.S. exports and protect U.S. interests and enhance the rule of law in partner countries. The reduction of trade barriers and the creation of a more stable and transparent trading and investment environment makes it easier and cheaper for U.S. companies to export their products and services. This is goodness if both parties have something valuable to exchange and if each side ends up satisfied with the arrangement. Right now in the US we are not satisfied. We have lost over 5M manufacturing jobs since the beginning of the century. Our annual trade deficit was $500B or 3% of the GDP last year. That money is used by foreign investors to buy real estate or businesses or other assets. But these stats don’t tell the whole complicated story. The complex story makes the solution complex. The WSJ covered this recently in an article on the Future of Manufacturing. If we close our borders to trade or if we heavily tax imports to slow down in the influx of goods, there are consequences.

  • We export more services than we import to the tune of about $300B. If we slow imports we could slow exports of our service industry thus hurting those US businesses.
  • If we tax imports of cheaper goods we are creating a regressive tax. In other words we will hurt the people with smaller incomes who can’t afford it.
  • We could lessen the value of our currency making imports look more expensive but that again will be a regressive action, hurting the wrong people.
  • Moving quickly could cause an economic backlash that could push the US into a recession.

None of the ideas above are easy to implement without repercussions. But we can take positive action to increase our competitiveness and move back to a positive trade balance. However, these ideas require leadership, partnership with government, some patience and a bit of altruism. We as a country seem to be short on those things right now.

  • Measure the costs: Company executives should measure the full, true cost of off-shoring. Doing the math rather than just following the crowd could accelerate the trend to keep manufacturing in the US.
  • Train workers: There is a gap between manufacturing workers needed versus available even today. This gap will increase as our baby boomers retire. We need to create training programs and apprenticeships like are available in Germany and other countries.
  • Embrace Technology: There are ways to improve our competitiveness and the time is ripe. Additive manufacturing, Internet of Things (IoT) and collaborative robotics are ways to use our technical prowess to beat the competition. US universities have developed and progressed these capabilities and progressive companies are employing them to improve productivity and features. The government should encourage investments in manufacturing technology. US incentives for investments in factory automation and research lags behind our competition.
  • Employ Lean and Agile Methodologies: Productivity in the US (GDP/hour worked) has increased year over year for 3 decades. In the first quarter of 2016 it actually decreased by .6%. We need to find ways of doing more with what we have. Lean for Manufacturing and Agile for Innovation are two proven ways to improve efficiency and speed up results.
  • Create Manufacturing Ecosystems: Regional governments have been encouraging a resurgence of focused manufacturing capabilities. Examples are the growth of automotive manufacturing in the Southeast or capital machinery in the Midwest. These clusters are attracting the right kind of workforce, setting up supply chains and are working with regional governments to create workable tax schemes.

We will not rewind time to the days when you could provide for a family and retire on one assembly worker’s wages. But it is possible to generate a good living with the new jobs that are emerging. A robot technician’s salary is about $60K.  A CNC programmer and operator earns about $40K. With the right kind of training and infrastructure we can revitalize manufacturing in the US and embrace good and fair trade once again.

Good and fair trade is within our reach. I gave up my Datsun with thoughts of better driving days to come. Similarly, we need to let go of the past and embrace a new manufacturing reality of automated factories building products the rest of the world will want to buy.

Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.      Barack Obama

Posted by: malstott | April 26, 2016

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