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Customer Manufacturing Group
In This Issue
Maximize Trade Show Investment
Best Practices Trap
Who Pays for the Waste?
What Are They Really Buying
Occam's Razor
More Information 



 

 


Maximize Your Trade Show Investment

Trade Show Floor

There is a key factor that is critical to the success of your trade show, and it is usually overlooked. Too often in the routine of logistics and tactics, we forget the most critical aspect of the visitor's experience with you at a trade show. Or we take our ability to do it well for granted ... mistakenly. 

 

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Customer Manufacturing Update
January 2012

Dear Mitchell,

 

Happy New Year. Here is your January Customer Manufacturing Update. Many companies are making plans for their tradeshow involvement for the coming year. With that thought in mind, we offer a white paper on how to maximize your tradeshow investment.
The Best Practices Trap

  

A well recognized management maxim in today's world is that each business activity should find "best practices" and seek to achieve at least that level of performance. While this might seem an obviously "good" idea, it may lead to several undesirable outcomes.bestpractices

 

Some of the more apparent limitations to an across the board, unilateral "best practices" approach include:

 

  1. It assures that each of your practices will be no better than the best you can find. Even if you are able to find the true best practices, simply emulating those practices may be insufficient to achieve a competitive advantage.
  2. Following best practices assures you a position as a follower, not a leader. Finding valuable new management methods can give you a significant competitive advantage.
  3. A corporate philosophy of mimicking best practices can create a culture that does not seek better than "best" practices.

Beyond these three, there is a fourth and possibly more important issue: knowing what to do first. To improve the throughput of any system requires an understanding of where the constraint to throughput resides. A "mindless" focus on best practices assures that investment is made everywhere in an attempt to improve everywhere. While continuous improvement is a proven management principle, and is necessary to maintaining a competitive position in today's world, it is not sufficient. Missing in the analysis is an understanding of where to apply additional resources first to improve results.

   

Constraint theory tells us that applying more resources to an unconstrained process element will not increase throughput. Therefore investing in so-called "best practices" across the board in your business is unlikely to be the optimal approach. It is analogous to attempting to increase output in a factory by maximizing the output of each work cell. This will absolutely maximize output. It will also maximize work-in-process and all related costs. Similarly, attempting to improve the performance of your company by maximizing the performance of each business activity is unlikely to be the optimal approach. The key is in understanding where the constraint to improved performance in your company is today, and focus on relieving that constraint first, then moving to the new constrained activity. This process continues indefinitely resulting in continuous improvement and optimal results.

 

Best practices and benchmarking are useful tools to set a minimum standard of performance. They should not be the ceiling. To adapt current best practices or to find ways to create best practices involves significant investment. That investment won't pay off if it is applied to an activity that is not a constraint to your company's performance. To adapt another old maxim: first strive to understand what to do, then focus on the most efficient way to do it.

Who Pays for the Waste?

 UAL Red Carpet line

While standing in line to board his flight to Denver the other day, a very nice woman excused herself from standing in front of Mitch in the first class line. He had been upgraded and she had not yet, but she was hoping to be. She told him she was unlikely to get her upgrade because there were two spots left and she was #3. She also told him she had just made her reservation the day before. I commented that she must fly a lot to make a reservation so recently and jump to #3 on the wait list past at least 10 other people. She said she did, and that it was almost always last-minute because she was a consultant.

 

Mitch said, "Wow do your clients not give you much advance notice?" To which she replied, "No my company can't get its act together and plan my travel in advance." He mentioned that he assumed that really drove up the cost of air travel. She acknowledged that it probably did. But, as we both noted, since she worked for a big consulting firm, and the client paid the travel expenses, there really wasn't much incentive to fix the wasted air travel expense by planning sooner, if the customer didn't complain. And apparently her firm did not feel the need to look out for their customer's money.

 

Do you have waste in your processes that nobody has an incentive to fix?

What Are They Really Buying?

 
 Dirty Dishes

If you've heard any us speak or read Mitch's book, The Secret To Selling More, you know that the core job of Marketing is to figure out What the customer is buying from your company they don't believe they can buy elsewhere. Jeff Krawitz describes this as What #3 in our paper, "Building A Customer Oriented Business."

 

We have LOTS of examples of this, and love it when we find a new one. Such was the case in talking with Jen Oliver of Shooting Stars Productions. When Jen was a teenager she was a VERY popular babysitter. Her calendar was fully booked by parents anxious to have her babysit their kids. She charged market rate, but while many of her friends were available, Jen was booked solid.

 

Was Jen a better babysitter than her friends? She says no. Did the kids like her better than her friends? Again, Jen says no. So what made her so popular with the parents? Simple she says: she did their dishes. When Jen left, any dishes that may have needed washing when she arrived, were washed and put away, as well as any she used while there.

 

Her friends always asked her what her secret was to being "sold out." She never told. But now you know.

 

What can customers buy from you, they can't get elsewhere ... or at least don't believe they can?

 

Occam's Razor

 

One of our Principals, Bayard Bookman, ran across this story, and we thought it well worth sharing ... true or otherwise.

 

A toothpaste factory had a problem: they sometimes shipped empty boxes, without the tube inside. This was due to the way the production line was set up, and people with experience in designing production lines will tell you how difficult it is to have everything happen with timings so precise that every single unit coming out of it is perfect 100% of the time. Small variations in the environment (which can't be controlled in a cost-effective fashion) mean you must have quality assurance checks smartly distributed across the line so that customers all the way down at the supermarket don't get upset and buy someone else's product instead.

Understanding how important that was, the General Manager of the toothpaste factory got the top people in the company together and they decided to start a new project, in which they would hire an external engineering company to solve their empty boxes problem, as their engineering department was already too stretched to take on any extra effort. 

 

The project followed the usual process: budget and project sponsor allocated, RFP, third-parties selected, and six months (and $8 million) later they had a fantastic solution ... on time, on budget, high quality and everyone on the project had a great time. They solved the problem by using some high-tech precision scales that would sound a bell and flash lights whenever a toothpaste box weighed less than it should. The line would stop, and someone had to walk over and yank the defective box out of it, pressing another button when done.

 

A while later, the GM decided to have a look at the ROI of the project: amazing results! No empty boxes ever shipped out of the factory after the scales were put in place. Very few customer complaints, and they were gaining market share. "That's some money well spent!" he says, before looking closely at the other statistics in the report. 


It turned out, the number of defects picked up by the scales was 0 after three weeks of production use. It should've been picking up at least a dozen a day, so maybe there was something wrong with the report. After some investigation, the engineers come back saying the report was actually correct. The scales really weren't picking up any defects, because all boxes that got to that point in the conveyor belt were good.

Puzzled, the GM traveled down to the factory, and walked up to the part of the line where the precision scales were installed. A few feet before it, there was a $20 desk fan, blowing the empty boxes out of the belt and into a bin. "Oh, that ... one of the guys put it there 'cause he was tired of walking over every time the bell rang," says one of the workers. 

 

 
 
 


Will it be a happy new year for your company? Wishing for one is not sufficient, you have to take action. What actions are you taking to create the outcomes you desire?

We appreciate your feedback to help improve these

Updates. If there are others you feel would benefit from this issue, use the Forward email link just below on the left.

 

Sincerely,

 

MGSig

Mitchell Gooz

 

Customer Manufacturing Group, Inc.

www.customermfg.com

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