Efficient Factory

From the CNBC Series ” The Business Of Innovation“  Rethinking Work:

“Despite enormous advances in technology, our workplaces are not nearly as efficient as they could be: each week, more than 40% of employees use incorrect information to make decisions, thereby wasting time and resources. The third episode of The Business of Innovation explores how “wiser work” can lead businesses and governments to prosper”

 While the subject matter meandered off topic to transportation, the program  provides a good basis for thinking about the changing nature of work.

 There is an imbalance in the use of technology in personal lives vs corporate environments. This imbalance has increased in recent years. Individuals have better information sharing tools at their reach than companies do. Facebook, Twitter, linkedin provide social networking opportunities never seen before. In factories, decisions made years ago still handcuff companies.   Old ideas still work as the accountants weigh the cost of new technology vs the incremental savings in costs when they should be measuring the increase in productivity.

If there was a low cost simple way to take existing technology to a new level in factories, companies would benefit from new flexibility without having to dispense with past capital investments.

 The current state of the factory is surprisingly backward in comparison. Systems and processes are very much like they were years ago when first implemented. Many solutions are crafted as “work arounds” providing the solution in a second rate way.

The following link is to a presentation that ends with some rather chilling observations about the future of American Business. It features Dana Marshall, former President, Chairman and CEO of Applied Energetics Inc. speaking at the 2009 August meeting of the Missouri Venture Forum

It lasts about 30 minutes. The chilling stuff is in th last 10 minutes.

 http://www.sbtv.com/MissouriVentureForum/8203

How will Startup Companies meet the needs of their investors?

We should be getting to a major milestone soon. He 787 will be airborne for the first time very soon. It’s coming up

The 787 as seen on 070807

 on two years since Sunday, July 8^th, 2007 or 7-8-7; the date that the new 787 Dreamliner rolled out in Everett Washington to much fanfare and a slick video production. Uunfortunately the cabin was bare inside. I just happened to see it first hand months later in November, on a plant tour of the Everet Faciltiy. Airplane number 1 was dusty and dirty and in various states of unassembly.

It’s true they missed initial launch date by a long shot but in their defense, Boeing had two important innovations to roll out. First, the product; this is the largest production composite structure ever made. The carbon fiber fuselage and wings makes the entire aircraft much lighter and 20% more fuel-efficient. It was a big task from an engineering and production standpoint. They are clearly charting new ground.

The second major innovation is the method of manufacture. Boeing decided to create an extended supply chain for finished major components of the airplane. It outsourced the manufacture of these components bringing them together in Everett Washington. Boeing is now primarily the designer and assembler of the finished product, leaving the parts manufacturing and subassemblies to others for the first time in aviation history.

Many issues with the manufacturing strategy cropped up over the last couple of years. Yes, there was a machinists stike early on but production delays were largely attributed to confusion and miscommunication from the supply chain. Information about the parts and information about the process did not always correlate. The status of readiness of parts wasn’t available or was often in the wrong format. The expense incurred of solving the problems is immense. Just consider the costs of lost revenue of waiting for two years for the most popular airplane in history. The presales figures have been very impressive having orders for over 850 new 787 jetliners.

The readiness of the supply chain and syndicate that Boeing set up are what many consider the root of the delay. If information was in the same format and standards were applied, much of the confusion could have been avoided. It’s clear that the information about the process and product were indistinguishable to Boeings problems.

The learning curve may be long, but Boeing is coming to the end of it, successfully.

Here are some promotional videos and multimedia about the 787 from www.newairplane.com

Remember the classic 1970’s books about declining quality in the car industry? The Lemon-Aid series of car manuals, have been issued annually since the 1970s. The quality crisis of the lemon was beaten. North American cars consistently rank as high or higher than the imports in quality. But now there is another crisis on our hands. So what does manufacturing do now in the 2000’s? Two of the big three are in bankruptcy. It seems as thought he auto industry has had a pretty good run, The Model T rolled out of Detroit starting in 1908 and by 1927 Ford had built over 15 million.   The 20^th century was definitely the century of the automobile and succeeded in driving the growth of the US economy and providing THE base for manufacturing

So where do we go now? How is manufacturing going to change now that these mighty two have fallen? In this age, it seems that “bigness” is not going to be a successful attribute anymore. The too big to fail argument is been hit a number of times in the last year. The quick, flexible, and the nimble are going to be the winners in the future. The companies of the future are the ones investing in the systems to adapt quickly. It’s a big change from what has traditionally driven industry.

Many think the most important trend in manufacturing is going to be the information about the product and process. Not just the information but also how relevant it is from the time it’s collected to the time it’s put to use. Technologies today are getting closer to that point but still factories are clusters of disparate information that don’t correlate. Different protocols for sending and receiving information and different data formats make the issue difficult. Traditionally a control issue is solved with a unique solution. Typically, a solution to a problem is seen as an engineered solution, and implemented as a single solution, for a single instance of a problem.

The effective use of information to take action rapidly is equally as important. Charts, graphs, and dashboards are nice to have but the killer applications of the future will combine these elements into the process seamlessly. They’ll do so by closed loop adaptive feedback mechanisms. It’s happening now but there is long way to go, and much value to be created in the process. Last year, in Information Week magazine, GM (A healthier GM than exists today) was completing an upgrade to their IT across all plants. In this article they were only thinking about some of the potential new technologies like Zigbee and Bluetooth. At least GM does realize that there is going to be plenty more adoption of new technology.

You can read it here

The Chryslers and GM’s, and even the Fords and Toyotas are going to be smaller and more nimble. Looking at the future and making a prediction is tough. The one thing that’s clear is that these events of the last year brought on a dramatic change. We are at the crossroads now. With some insight, the path taken will lead to prosperity. Manufacturing has to make the right investments to ensure prosperity.

The New York Times published an article on Business Planning; May 13 2009.

http://www.nytimes.com/2009/05/14/business/smallbusiness/14hunt.html?_r=1&em

It’s a good read for those in the hunt for funding. Cited is a recent study by the University of Maryland that sought to correlalte the effectiveness of the Business Plan to obtaining funding from investors.

In essence, the true value of a plan is internal to your organization.

Well… this title was supposed to be sung to the Nick Lowe tune, popularized by Elvis Costello, referencing ‘Peace, Love, and Understanding’ but I know it doesn’t quite work. My apologies to Mr. Costello and Mr. Lowe. The challenge of writing on a seemingly overwritten business subject was to try and spice it up somewhat. Now that I’ve got your attention, I hope I can hold it for a couple of minutes!

Realistically these three words are very important to any business or organization. Even if you are as large as Microsoft or even just starting out as a lone ranger, these are purpose statements to run your business by. Unfortunately, businesses that have taken the time to write their Vision Mission and Culture do so and it is quickly placed “out of sight, out of mind”.

The question to ask is “What is the purpose of these purpose statements?” Answering that question will get you a lot more mileage out of them.

Vision. This is the long-range goal of what you see your business becoming. It’s out there on the horizon as far as you can see. Remember; as you get closer to your ideal your horizon expands so always re-evaluate your Vision.

Mission. This is how you are going to accomplish your goal, the mission is simply explaining what course the company takes in day to day movement towards the horizon. It also plays a defining role and sets forth the values and beliefs that the company holds as most important. Companies love to hang a paragraph in their lobbies about themselves but there they sit. Many of the mission statements I have read as subjective, although that is the idea it’s good to get an objective view. It’s nice to let visitors know what you are supposedly all about but its real use is for you. To really understand this you really need to understand yourself.

Culture. This is the most overlooked of the three yet it is the most utilized in day-to-day operations. Simply put, it is the rules of the game defining how you operate as a company. It’s about what you expect from your people your customers and your suppliers. It sets behavior standards for your company. It should have tight aspects to it – absolutes and limits of what is tolerable – as well as loose aspects to it – to enable innovation.

Collectively these statements should be used as symbols to measure your strategies against. Does your new chosen business strategy get you closer to your vision of what your ideal company is? (Vision) Does it fit with the path you want to take? (Mission) Finally, is it capable of being fit into the set of rules by which you operate? (Culture)

The more clearly you can define your purpose statements the easier it will be for your employees to follow them. As well, these statements are the main things that run the company when you are not there. Your employees should understand the values inherent in them.