Invest in Simplicity

Many manufactures are installing complex MRP programs to manage complex manufacturing strategies.

The quest to squeeze the last penny out of shop floor costs drive managers to increase efficiency by scheduling bottleneck operation to assure continued operation, increase batch sizes to distribute changeover costs across the maximum number of units and to interlink unit operations to remove non value added processing steps.  This requires a production scheduling and cost management system to manage the additional complexity imposed by changes to the operation.

What this also does is require production plans that diverge from the normal flow of orders from the customer and increase the production cycle, thus requiring investment in more raw, in process and finished product inventory along with training and controls to handle the complexity. These costs may exceed the original improvement savings.

What happens if the manufacturer, instead, invests in simplicity?  What is the most direct way the product can be produced as close to the order flow and the customer as possible.  Concentrate, instead on removing change over time and costs so that the line can be cycled more rapidly.

The results will be inventories will decrease, issues will be more apparent, training will be easier and lead times will shorten.

Planning will be simpler; maybe to the point that material and cost tracking will be the only requirements from you management system.  Reduced complexity = reduced costs and happier customers.

Adapting to a Rapidly Changing Environment

With the pace of change being extreme in today’s business world, people who can adapt rapidly are usually the most successful. You can’t afford to lag your competitors.

To be successful with change, you must gain new skills.

Jeff Haden in his article: “How To Master Any Skill (No Talent Required)”, talks about not only applying the hard work to learn a skill but the need to get out there and make mistakes to really master a skill.  Jeff goes on to show several examples about how this works.

You can’t be timid and wait until you master a skill, you need to go ahead and make mistakes.  You need to also learn how to minimize the impact of those mistakes, however.

The Importance of Selling Yourself

Be it project management, business or consulting, selling yourself is essential.

As a Project Manager, you market confidence. You lead your team, giving them clear direction toward achieving the end goal of the project. You sell confidence to your sponsors, showing them that you know where the project is and where it is going. If an issue comes up, you communicate not only the issue but the contingency and the impact both short and long term.

In your own business, not only are you selling a product but you also are selling the experience. With the interface between you and the customer, it is the relationship that is developed that is critical to get the business long term. If you are using sales people to interface with the customer, you need to establish the overall approach so that the relationship is established and nurtured.

With consulting, you must establish from the beginning that the purpose of the interaction is to solve problems that will add value to the client.

Before the next interaction, think about how you will come across in a positive, helpful, way that will establish a valuable relationship for the customer.

Don’t Give Away the Family Jewels

INC. Magazine,  in the latest issue, ran an article about a small online customer billing website that decided to change its pricing structure to increase revenues.  This was met by lots of bad publicity and negative internet comment because they had the nerve to start to charge their smaller customers….at all!  They had hoped that by giving away the service, as their customers grew, they would convert to paying customers.  This is a model that is being used with some online web publishing companies among others.

Here is the issue:  What is being given away is the most valuable part of the company’s offering.  Why pay for it if you can get it for free?

Instead of giving away the family jewels, the company might have considered giving away the service for a period of time with the understanding that after say, 90 days, there would be a small fee to continue.  Here you are able to get the customer to sample the offering, and get used to paying if they found value in it.

Another way to establish trust with a potential customer is to give away good information that potentially helps the customer improve their business  for free,.  Once the customer sees the value and gains trust, there is a good chance that they will sign up for a paying account out of loyalty.

So, it’s tempting to give away the family jewels to build a customer base, but be careful!  Look to other ways to gain trust and loyalty, but keep the most valuable parts of your offering protected.