Why You Should Understand Crypto Currencies

Unless you have been in living in a cave or shipwrecked on an uncharted island you have heard of Bitcoin. If you were paying closer attention you might even have heard of Blockchain technology that is foundation of Bitcoin and other Crypto currencies.

 

What do I Care?

Once remember a high level manager saying in response to a request: ”A computer for each person, are you insane! Why do you need email there is a phone right beside you. WordPerfect, we have the latest typewriters in house.”

We can look back and laugh at that now. That manager had a good heart but no vision.”

How about you today?  Are you looking forward and seeing the possibilities? Many processes that our now performed by entire departments could theoretically be performed by one or two people utilizing smart contracts with an Altcoin like Ethereum.

Material certs, accounts payable, account receivable, transferring money around the world fast and cheap are just a tip of the iceberg.

Businesses not studying this technology will put at a huge competitive disadvantage. Employees should really prepare themselves reality of the changing technologies. This very simplistic overview is to incite your curiosity to do more research on the subject.

What is a Crypto Currency?

Crypto currency is digital money that is designed to be secure, programmable and anonymous in some cases.

What is it used for?

It’s used as a value of exchange similar to dollar, ruble, frank or pound. It can also be used to trace, track and verify anything of value.

What are its Advantages?

Value can be exchanged worldwide peer to peer without a trusted third party. Trusted third party examples would be Western Union, PayPal and MasterCard. Fees to transfer money are a fraction of the cost of trusted third parties.  Buyer and sender can be anonymous plus with advent of programmable coins payment parameters can be automated and automatic.

How many type Altcoins are there?

Thousands but the top five by market cap as of today are Bitcoin, Litecoin, Ethereum, Ripple and Bitcoin Cash. Note all coins other than Bitcoin itself are referred to as Altcoins.

What distinguishes one from another?

Each coin has what is called a “White Paper” that describes its purpose for existence and what problem it’s trying to solve. Through the use of blockchain technology the double spend problem was solved and Bitcoin was born. Just like you can’t give the same dollar bill to someone twice you also cannot spend same Bitcoin twice. But there is a problem with scalability speeds and block size that are being solved in new coins such as Bitcoin Cash. Many new coins simply solve or improve upon current coins.

Is it a Fad?

Bitcoin by itself has a market cap of 16 billion dollars and has experience phenomenal growth since its inception 2009. There is large community of people who believe that business and government manipulation of their current fiats are actually more damaging to economies than crypto currencies that like gold have only a finite supply. It’s interesting watch Captains of established industries struggle to accept a currency they cannot easily manipulate.  You make the call.

Finally

There are many Altcoins that are simply scams so buyers beware however it still behooves the Lean Management Team to study this subject while in infancy of adoption.

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Why Many Lean Projects Fail

If you have worked in any moderately large manufacturing environment surely you have witnessed multiple iterations of Lean Programs. By now everyone from finance, engineering, human resources, quality, manufacturing and procurement consider themselves experts in lean manufacturing techniques. Just ask them.

Lean methodology was once referred as total quality management (TQM) created to drive out waste through the use of statistics and creation of standardize work. TQM focused on serving the customer both internal and external. The addition of the internal customer was major morale boost for those accustomed to waiting timely and accurate information from other departments now referred to as silos. TQM was once embraced throughout the rank and file of organizations. This is a loose definition quality programs go by many names.

So what happened, after all everyone you speak to is now an expert? There are books, training manuals and consultants’ galore!  Why is TQM initiatives now referred to simply as the “Program of the Month”?  What is the reason inventories are high and output is low when there is so much blood, sweat and tears put into optimizing manufacturing systems. In an earlier post I discussed the how optimizing non bottlenecks processes just to report a win is self-destructive. But today I’m going to take a more simplistic approach.   Without all the parts (components) you cannot build anything, revolutionary revelation huh? Let’s look into world of sports.

The University of Alabama is perennial football powerhouse in college football. At the high school level private high schools have racked an incredible amount of football championships within in the country.  What do the two have in common? Both continually field the most valuable component in football, quality players! Alabama successfully recruits the best players in the nation. Private schools have major advantage over public schools because there are no borders restricting student eligibility result great players!. You can copy their playbook, build world-class weight rooms and stadiums but without the quality players you will NEVER consistently beat these teams. They may be good recruiters or have a competitive advantage either way they have scoreboard!

In the world of manufacturing consider your purchased materials as the players to put on the field of play. Your material needs to ready an available at game time no exception! We can’t afford to delay the game every quarter due to shortages or quality issues. Without high quality materials or players even the most advance well prepared game plan is doomed from the start.

If you’re spending a substantial amount of time on internal processes and efficiencies you may be missing the boat. More time and focus is needed in supplier development when developing Kanban lines.

You need to recruit and retain quality suppliers plus have back up or fall back waiting in the wings. Think of it this way, you’re at Bryant-Denny Stadium with 100K of your closest Roll Tide friends awaiting the team to come out of the tunnel and nothing! The team is stuck in locker room the uniforms are still in laundry or key to locker room locked whatever. Great coach great game plan doesn’t matter if the players don’t make it to the field!

Too often Lean Projects fail due to inconsistent delivery of quality product to line when needed!

Things to consider …

  1. The ability to change suppliers shouldn’t take an act of God. If you want suppliers to step up their game and compete they must have real competition, or least know they can be easily replaced.
  2. Spend more effort on supplier development and communication.
  3. Understand and go see how the supplier operates. Walk through the process from order entry to shipping.
  4. Don’t start Kanban lines until you’re at least 95% sure that suppliers can continually meet schedules.
  5. If suppliers tout buffers have real time methods to verify.
  6. If customer directs you to a specific supplier than they should share responsibility for any shortcoming of that organization.
  7. Don’t promise more to your customer than your supplier can deliver. This includes product features and long term agreements. For example giving a 5 year agreement to customer but negotiating 1 year agreement with supplier you’re asking for trouble.

You can’t go wrong redirecting resources to outside suppliers after all that’s where the game begins! You probably already have a great game plan, field, coaches and fans just waiting for the players to take the field!

 

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Theory of Constraints – Revisited

In 1984 Eliyahu M. Goldratt wrote a book entitled “The Goal” which is geared to help organizations achieve goal of continuously improving linkage and flow of manufacturing operations. This methodology would ultimately be coined the Theory of Constraints (TOC).  It’s a simple but powerful tool.  Find the constraint and optimize it until a new constraint is identified downstream then optimize that until you can go no further. Always look to improve but don’t cannibalize your operation.

Its 2017 let’s see that’s 33 years later and still TOC number one tenet is routinely violated! The number one rule is DO NOT OPTIMIZE OPERATIONS THAT FEED THE CONSTRAINT!

I have routinely seen this done and it is definitely one of my biggest pet peeves.

Optimizing a non-bottleneck has zero impact on the throughput of entire system. Constraints are not bad there inherent to every process however they must be identified and understood.

Too many lean events focus on the efficiency at the operator level of non-constraining departments. Time study after time study is performed focusing on how to take seconds out of an assembly process. Then once that non constraining assembly process is optimized it can efficiently run excess inventory to the constraining department by increasing the bottleneck.

What’s the reason organizations fail to heed this major tenet of TOC? In my opinion organizations and management systems are set up to report short term wins. Top management doesn’t want to hear that the problem is complex and we’re working on it they want to hear wins. Report outs must say something positive even if it optimizing a non-bottleneck which may ultimately drive up inventory, scrap and costs. Finance departments that don’t use lean accounting practices focus on efficiency and utilization at all process is also the culprit. Low efficiency isn’t a concern if it’s still overloading a downstream bottleneck. Even in Kanban environments this forces managers to keep working (machine utilization) even when signals say to stop.

Constraints are best managed by focusing on reduction of scrap and rework, reducing set up and change over time, discovering new technologies, using old technology as needed and buffering shared resources. Again you must start at the area of bottleneck, typically a shared resource.

Take away. Optimizing process before constraint has zero impact on entire process. Optimizing after constraint no matter how well can only produce at the level of constraints output.

Attacking the constraint is not a two week lean event it should become a continual management practice.  Removing constraints is time consuming, expensive and might even call for the ultimate sin increased inventory!

But if nothing changes every report out will focus on how we saved travel by 128 steps to the paint booth and reduced 20 seconds in assembly without mentioning parts will now just increase backlog of constraint along with inventory WIP!

If you haven’t read the The Goal its a must read for lean practitioners! You can get copies for less the ten dollars!

What are your, thoughts, opinion or stories would love to hear from you!

 

 

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5 Reasons to Focus on Culture Transformation of Business

By Charlotte Kelly

Culture Transformation is one of our biggest business buzzwords in recent time. But what does it really mean for business, and why is everyone talking about it?

At heart, Corporate culture is the collection of values, visions, missions, and day-to-day aspects of communication and operational goals that create the atmosphere that permeates and determines how employees work in their organization.

According to the Barrett Values Centre“Vibrant cultures have high levels of performance because they create internal cohesion, attract talented people, and inspire employees to go the extra mile.”

Without a company culture that promotes the behavior’s and actions of Operational Excellence and Continuous improvement, an Operational Excellence Program is unable to embed itself in the long-term across any organization.

#1 Your supply chain and processes are getting more complex

The world has changed in the last 2 decades, and the use of email, internet and social media means that it’s hard for businesses not to be confronted with globalization. This is increasing competition, pushing businesses to expand portfolios, and ultimately forcing them to design increasingly complex manufacturing processes and supply chains.

Alongside this, the rise in intervention from Government measures and regulations is causing a requirement of compliance across the board. In a more complex environment, standard best practices are more and more likely to give way to high consequence/low probability events. Mistakes mean more now than ever before, and rising complexity means processes, that are no longer simply linear, are harder to resolve. Creating a culture of Operational Excellence allows employees to prevent or immediately resolve issues, before they hit the next stage of the process.

#2 Nobody benefits from a high employee turnover.

It can cost thousands of dollars to train and recruit new employees each year, so naturally keeping your current employees happy makes solid business sense. A healthy culture is proven to increase employee satisfaction and happiness. This allows employees can see themselves as an asset rather than a liability, leading to increased morale,  improved productivity and more — all of which, clearly,  have a positive impact on profit and revenue creation.

“If your employees have faith in you, it’s far easier to put your faith in them”

#3 Make knowledge-sharing a natural endeavor within the business.

When Employees feel valued, they are not afraid to share their knowledge and skills with other members of the team. Instead of isolating themselves and their skills by trying to remain a ‘unique asset’, they are encouraged to progress, and invest in their own team for the good of the business as a whole.

#4 Once you embed a culture of Operational Excellence, your employees will sustain it.

If your employees have faith in you, it’s far easier to put your faith in them. As complex and time consuming as it may be to implement a long-lasting culture of Operational Excellence to begin with, positive habits and problem-solving attitudes will be far harder to change. As mentioned in #3, employees with a positive company culture will pass these behavior’s on to their more junior staff, cultivating and enhancing the culture.

#5 It feels good to lead the way.

A HRO, or High Reliability Organization, is an organization that has a remarkably low number of mishaps consistently over a sustained period of time while performing highly complex and inherently hazardous tasks. HROs are thought leaders in their industry, and lead by example as trailblazers for aspiring organizations.

Our Top 10 Change Management Books

However, while many leaders are waking up to the fact that transforming their organization’s culture to that of an HRO may be their greatest lever for improving safety, reliability and profitability, they don’t know where to start or what the process looks like to create the desired culture.

So, you’ve got a few reasons to start prioritizing a sustainable culture of operational excellence in your business ASAP. But how, we hear you cry! Luckily, we’ve got just the thing with one of our favorite white papers, courtesy of Wilson Perumal & Company. Take a look below to grab a copy of our #1 most downloaded white paper on Insights, Creating a Culture of Operational Discipline that leads to Operational Excellence‘ – if you don’t have it already.

 

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Whisky Maker Fights Counterfeiting With Blockchain Technology

There is yet another company utilizing blockchain technology. This company uses blockchain to fight counterfeiting.Ardnamurchan Distillery a distiller in Scotland in conjunction with technology firm arc-net plans on using blockchain technology to track and authenticate bottles of whiskey throughout the entire supply chain.

Through the use of unique QR code on each bottle the distillery will be able to trace, track and authenticate transactions. This will safeguard against counterfeits and guarantee integrity

By simply scanning the bottle a customer can find out the entire story of the whisky they just purchased. Every bottle you purchase will tell the unique story of its origin and travel. Just thinking out loud this would be great for baseball cards and other memorabilia.

Block Chain Technology

Blockchain provides a decentralized database, or “digital ledger” of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded. This can be accomplished without the need for a trusted third party thereby reducing the cost and increasing the efficiency.

Technology works for almost every type of transaction involving value, including money, goods and property. Its potential uses are almost limitless.

While still becoming familiar with this technology I’ve definitely become a cheerleader of its adoption or at least greater study in the manufacturing realm. From material certs to payment processing blockchain technology is definitely a viable option that should be explored.

 

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15 Lean Lessons Learned

Going through an old notebook I came across some answers of a question presented at a professional development gathering. The question was “What lessons have you learned from lean events and other continuous improvement activities?” This was a few years ago today I think more in terms of leadership and inspiration as the main drivers for success.

As I reviewed the list they sounded unusually negative although I’m a major proponent of continuous improvement activities. This might be due to the fact I keep a copy W. Edwards Deming’s Out of Crisis next to my computer to remind me we can do so much better. But the same old obstacles of success Deming discussed 20 years ago are still prevalent today primarily the focus on short-term goals. Deming’s book is a must read for any Lean Soldier!

Without further ado here is my list of 15 lean lessons learned in no particular order.

  1. If every lean event is reported as a success then your activity is typically just a dog and pony show of little substance and longevity.
  2. Only individuals responsible for the outcome of activity should lead an event.
  3. Conflicting goals and competing silos are easily identified in lean events but seldom acknowledged or addressed.
  4. Managers with wide (horizontal) experiences rarely have a deep understanding of the business they manage.
  5. Managers with deep (vertical) experience of business rarely search for creative solutions.
  6. Every leader believes they understand lean concepts but rarely adopt them.
  7. Private companies appear more agile and responsive to lean initiatives than public ones.
  8. Investigating the origins of tribal knowledge is much more productive than just dismissing them.
  9. Systems drives results, expected results don’t drive system.
  10. Continuous improvement doesn’t mean perfection.
  11. Maslow”s hierarchy of needs is one of the most infallible business tenets.
  12. Standardization of practices helps immensely.
  13. Quality is free only if you have finance team that understands lean accounting.
  14. Lean is a journey not a destination.
  15. Deming was correct.

These are just some of my lessons learned take a moment and post yours, good, bad or indifferent.

 

 

 

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Illinois Plan to Use Blockchain to Digitize Birth Certificates

The state of Illinois announced a pilot program that would use Blockchain technology to digitize birth certificates. The purpose is to allow government and businesses the ability to verify and authenticate a citizen’s identity by requesting encrypted access to verifiable files.

 

Data would be stored in a tamper proof ledger similar to cyber currencies such as bitcoin use. The ledger would include information date of birth, blood type or any other related information. Data could only be accessed by those that possess the crypto key that would unlock the file.

In the pilot program, the partners will develop and test Blockchain technology that will enable parents and doctors who are present during the time of birth to officially log or register the birth on a permissioned Blockchain. The tools being tested were based on the work done by a task force within the World Wide Web Consortium

Blockchain technology is coming to a business near you soon. This technology has proven itself robust and secure enough to transfer currency. Here are just a few other uses concert tickets, land titles, voting, vehicle registrations and material certifications.

Through Blockchain technology much waste (middlemen) is removed from the process making it faster and less expensive than traditional methods. We lean practitioners should really appreciate that!

I will monitor and report back on the Illinois birth certificate project.

One company wants to sell concerts tickets using Blockchain technology. I’m really excited about that because there no reason to pay an extra $10-$15 for privilege of online ticketing.

Do you have subject that is compelling to the niche? I’m always looking for good content from guest contributors.

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Blockchain The Next Generation of Business

As Lean Practitioner I seem to always have my eyes and ears focused at least casually on business trends, management practices and leadership skills. The latest find was the term “Blockchain” technology.  Interestingly I haven’t heard much of this in the trade magazines that I read. I’m obviously late to the game.

After doing a bit of investigation on block chain found this technology to be somewhat mind boggling. Blockchain, additive manufacturing, cloud computing and nanotechnologies are really making business interesting again.

This post is not at all inclusive or in-depth explanation; rather it’s a tip my lean soldiers to seriously begin studying Blockchain technologies. Decide what impact implementing or ignoring Blockchain will have on your industry.

Blockchain technology is simply a public ledger of all Bitcoin transactions that have ever been executed. It is constantly growing as completed blocks are added to it with a new set of recordings. The blocks are added to the Blockchain in a linear, chronological order.

A Blockchain technology allows for the movement money through the use cyber currencies outside the traditional central banking system.  The ledger is open decentralized and shared throughout a community. This technology has solved the core problem of cyber currency which is “double spend” that is ability to spend same bitcoin twice. Once you spend your coin just like a real paper dollar it’s gone and the one you given it to now hold it. Supposedly un-hackable these transactions are cheaper and faster than using centralized banking.

The technology has even advance to where it can be used for smart contracts, electronic voting, payroll and even supply chain proof of provenance. That means fast simple and correct material certs that can be digitally audited and traced in seconds! Excited to learn more about this!

Every technology old and new there are pros and cons so do due your due diligence but know Blockchain is coming your way in one form or another. I’ve begun to invest myself but please do your research if you decide to in the future.

Have a post you like to share? Let us know.

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Are Executives Getting Fake News Regarding Lean Implementation

 

If you been a Lean Practitioner for more than a decade I’m sure you can relate to the post today.

 

When listening to top executives give presentation regarding continuous improvement I’m always encouraged. They didn’t get where they’re at without great communication skills and charisma. After all these are true believers appears only the successfully of continuous improvement program reports get to their desks.

The Presentation

You know we’re thriving to be a world class customer focused organization that is agile and sensitive to the needs of all shareholders and employees. We shall remove waste and redundancy and put in place lean operating systems that drive proper linkage and flow throughout the organizing.

The Reaction

Typically everyone is energized and ready to kick waste in the butt. The buzz is starting everyone knows of some type waste and redundancy in their own jobs. Practically everyone begins to collect lists of turn backs and system failures.

The Implementation

Now it’s time to learn the lean tools. This is where things begin to get rocky. Most have expectations to begin problem solving at least the low hanging fruit. However there is a process for problem solving and you have not learned it yet. Someone might say “if the mortgage department personnel simply created a completion checklist like our Detroit division we could reduce errors tremendously.” The normal answer would be once you’ve been trained you’ll understand how to quantify, Pareto and present your issue for later review.  No brainer issues are sometimes lost in the discussion making harder to present the problem than to just solve it.

 Training

Now it’s time to learn the tools. During training you learn all the great slogans terms and theory of lean. On paper it all makes sense looks attainable and once again you get another tingling of hope that this just might work.

The Work Shops

Now it’s time to put that training to use and pick a issue to tackle.  Of course most issues have been selected in advance by management not organically derived because group may decide on a real problem that isn’t solvable but highlighting that would be of great importance to everyone. Sometimes understanding your limitations is the only ways overcome them. As a result problem that is clearly solvable at least on paper is chosen I understand both pros and cons of this.

The Report Out

After a week or two of problem solving and using all the tools of quality it’s time to report out to management. I have never seen one not a single one fail to present a success that is to be the template of all other problems regardless of the complexity.

The Results

The results always seemed mixed. While everyone understands and appreciates the tools and methodology, the workshop subject was just a microcosm of a much more complex system. Much low hanging fruit is lost due to the complexity of the tools and the truly complex problems are never really addressed. Basically it seems learning the tools were really the product not truly solving the problems they were meant to solve. When this happens the next problem solving tool is developed and rolled out  before the last tool was fully implemented. Creating what we all know is the flavor of the month quality system.

The Question

If after continuous training and so called successful culture change events that were all successful why aren’t all organizations meeting their targets. So I ask again “Does Accurate Lean Reporting Get to Top of Organizations?”

Tell us of your story in implementing lean principles there are plenty waiting to be heard.

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The Promise of ERP

By Guest Contributor

Enterprise resource planning (ERP) software implementation is a business trend that show no signs of stopping, albeit growing at a slower pace than in the past.  For many growing businesses ERP seems like the ‘obvious’ solution to address many of the growth issues that their business is facing. And for some, it feels like not opting to deploy an ERP system is akin to conceding to the competition.

But is this really the case? Does ERP deliver the goods for most businesses, most of the time?

The answer of course depends on who you ask. Data about ERP implementation results is contradictory and depends largely on the definitions used to determine the final outcome. Some studies suggest an incredible 72% failure rate, while others indicate meaningful benefits to working with an ERP software consultancy.

For businesses considering a new ERP system it’s a good idea to tread carefully. When it goes right, ERP can be an irreplaceable driver of productivity. But when things go wrong, they go really wrong.

The Good News

In a best case scenario companies will benefit from using a software designed for their specific needs. Best practices are baked right into the system, which could improve some internal processes. And the company will likely save on IT costs and costs related to using multiple software services.

Furthermore, ERP enables a deep level of visibility into the current status across all aspects of the company. This makes it much easier to deploy resources more effectively and address issues before they become critical.

Best of all, integrated and automated workflows replace wasteful manual work moving data across systems. For example, if an order is received then every relevant person across multiple business divisions is immediately updated and knows exactly what is expected from them to complete the order. Continue reading

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