Review – 7 Ways to Disrupt Your Industry

Review – 7 Ways to Disrupt Your Industry,

Bruce Kasanoff & Michael Hinshaw, Fast Company, June 4th, 2012

Messrs Kasanoff and Hinshaw’s thesis in 7 Ways to Disrupt Your Industry is that disruption is coming and every firm is going to feel the effects.  They offer 7 ways to lead the disruption vs. fall victim to it.

I want to explore 3 of the recommendations:

1) Totally eliminate your industry’s persistent customer pain points.

Practices exist that drive your customers crazy.  Most companies interface with their customers are stupid and cause considerable bad feelings.

The best comparison of this is how you are treated by Microsoft vs. Apple.  Microsoft continually changes how you interact with their products, with frequent failures and freezes.  Apple just works well.  Try buying something on Itunes to see how simple it is.

Their recommendation is to look at your interface through the customers’ eyes.  If it is complicated, just fix it.

Unfortunately, this is not terribly disruptive.  Most market leaders already have extensively redesigned their interfaces.  If you still have difficulty here, you are way behind.

2) Dramatically reduce complexity.

Stripping out complexity is the new mantra. The more complex any process or practice in your company, the more hidden wastes exist that result in huge cost to the business.  Take out the complexity and you will be much more competitive.

This includes your product.  Customers don’t want to pay for features that they don’t want.  Start simple and add only the features they will pay for.  This takes huge efforts, but puts your company in a leading product position.  Complexity impacts the customer interface.   Simplicity equals less errors with the customer.

Again, Apple’s sleek designs are simple to interface with, are flexible but are not overly stuffed with features that people don’t want.

3) Cut prices by 90 percent (or more)

You don’t cut prices by 90 percent through marginal improvements.

You need to look at what is the customers’ problem that needs to be solved and innovate how to solve it with the lowest input of energy.  This will also help to focus on reducing complexity with your product and interface.  All costs must be looked at and eliminated if they don’t add value by directly solving the customers’ problem.

By putting the investment into making your product and company easy to work with a sleek, low cost product will help to greatly insulate you from the disruptive marketplace.

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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.