Finish Strong® by Becky Morgan

Most of us hire people to fill a slot -- a given role. That happens all too often because we hire in a reactionary mode, to someone leaving or to sales growth.We talk about cross training, but often don't provide it for a number of reasons: no time, will have to pay person more, or not sure what we will need are just a few.If your company talks about sales mix impacting productivity or other measures like on-time delivery, it often reflects a lack of flexibility or agility with our work force.Cross training employees can be expensive, but can pay for itself every day. Random or time-filling cross training will likely be expensive and not pay for itself, ever.Operations leadership are well served by creation and maintenance of a widely visible cross training matrix. The matrix starts with a picture of each employee on the Y axis, and the names of the various relevant skills on the X matrix. Where the picture and the skill intersect is the information about that person's level of mastery of that skill.Now review what that list of relevant skills should include. Some simply name machines, but often there are subsets of skills for a given machine that are important and not equally mastered by all. Rather than worry about perfect, create the list of skills that seem to make sense at the start.Now, it's time to indicate who (the pictures on the Y axis) has which skills (the X axis entries). Most find it helpful to define categories, like "run with supervision," run without supervision," "perform setups," and "train others to operate." These classifications will vary depending upon your business and staffing models.It is time to fill out the matrix. You can look across and see who is capable of what, and look vertically to see who all is skilled in a specific machine or task.You've created the "current state" matrix. That tells you what you currently have. What's next?How will you keep this accurate? The fact that John Doe ran a machine a year ago doesn't mean he is still qualified at the same level to do so again. How does your re-verification effort work?Similarly, you don't need everyone cross trained in every machine or skill. How many do you need for flexibility and to support growth?Each column should indicate a number for the goal skilled personnel. You may need 3 trained on Machine 1 and 6 trained on Machine 2. These numbers are based on product demand, engineering intentions, the number of shifts, and other factors.Your current state matrix, combined with the target number for each skill, makes visible the needs of the organization for appropriate cross training. This is a live document, as new skills are added, people lose skills over time, and our expected needs change.Operations is responsible for capacity planning and management of people, equipment, and processes. The cross training matrix I have just described to you is a simply and important tool in that effort.

When I worked for TRW in the 1980's, the company required everyone with purchasing responsibilities to take the Chester Karrass negotiating course. At that time it was 100% focused on the assumption of a zero sum game, where whatever the other "side" got came directly from you. Win-lose. Since then companies have come to understand that successful suppliers are required by successful customers, and vice versa. Win-win became the order of the day.Unfortunately, that understanding itself often ebbs and flows with near-term earnings, and for too many companies it has yet to extend beyond the commercial supply chain.Every business has five constituencies: customers, suppliers, employees, investors, and the community at large. The concept of community extends into the future. Every responsible company considers all five when making major decisions. Too many leaders focus first on investors, and then on customers, and then perhaps on suppliers. If there's money "left over" the employees may get a raise or a bonus. The community? Well, if there's still money left over, maybe we'll donate to something or fix that fence.Managing costs is integral to long term success. Managing costs is not the same as stretching payments to vendors, taking discounts not earned, or laying off highly skilled employees when times are tough. Poor processes, guestimate specifications, slow time to market and unverified products, ineffective onboarding and training, accepting bad orders or customers, staying with suppliers uninterested in improving your success, firing suppliers without investing in their success, ignoring local schools — these, and more, are all significant contributors to poor financial performance.Consider what it takes to be a company that the best want to work for, suppliers energetically support, customers seek out, long term investors chase, and that the community is thrilled to have. You can't get there without being profitable. But being profitable doesn't put you there either. Profits are important. They can and should be derived from well considered decisions, not short term ones to maximize today's numbers.As you consider significant decisions, I encourage you to ask yourself: 'what is the impact likely to be on all five of our constituencies?" If all five benefit, now and in the future, it's an easy decision to make. If not, consider both the short and long term impact on each of them. Then make the right decision, which might well not be the one that maximizes profits.To focus solely on maximizing profits is a strategic mistake that few of you can afford to make.

Phil Spector was a very successful music producer and songwriter, who was also convicted of murder and serving a long sentence when he died in prison. Talented people can be bad people.Talented bad people can also do good things.Phil Spector produced the famous Ike and Tina Turner song "River Deep - Mountain High." He knew how controlling Ike was, so he created a unique contract for this work, paying Ike Turner $20,000 to stay away while giving credit to both Ike and Tina Turner. That seems like a talented bad person doing a good thing.We all know the story of Ike repeatedly beating Tina, until she escaped one night with no money and no where to go. Working long and hard at low-end jobs to keep herself and her children fed, she knew that she was a really good singer. Still under contract with United Artists she released solo albums, none of which succeeded. The UAR contract ended; she signed with EMI in the early 1980's, and as they say, the rest is history. It is easy to be impressed by talent, even when that talent is covering significant character flaws, ergo Ike Turner and Phil Spector. It is easy to overlook world-changing talent when it pushes a mop bucket, like Tina Turner.How much talent do you reject because it doesn't look like the talent you normally hire? How much talent do you keep, despite toxicity, because it can hit the high notes?We all know, whether we like it or not, that culture eats strategy for breakfast. So why do we live with toxic workers? Not one of them anywhere in any role for any organization is worth it. Many of us choose to be optimistic, hoping that the person will improve. How long is enough? One day? One month? One year? Every minute you accept toxicity as acceptable behavior you are driving away everything that is good about your organization. No level of skill can outweigh that. Your organization may be filled with Tina Turners looking to escape because of the Ike Turner or Phil Spector you choose to retain.What's love got to do with it?

Why would a senior employee keep tricks of the trade secret from others? For one reason only: a lack of confidence.Someone who acknowledges his own talent and thinking skills would not be intimidated by others having the same abilities. Someone committed to team success would ensure knowledge is public -- that is, known and available to many -- and not private -- that is, known only by himself.In this podcast I provide examples of how and why to ensure the knowledge of your organization is not lost when someone walks out the door for the last time.

A few years ago I volunteered to support the Continental Cup activities in Cleveland. This is an international sporting event that included 2500 youngsters from ages 8 to 18 from 12 countries competing in a variety of sports.My first day, I was an electronic scorekeeper / clock operator for basketball games, seated next to a young man who was to keep track of individual statistics, team fouls, and team time-outs on paper. I received 2 minutes of training on the equipment; not sure he received any on his role. We did have experienced refs.Unfortunately, the court we were assigned was in the middle, with fans at one end and the scoring table (us) and the players at the other. With whistles blowing on courts on both sides and required to look at the far end of the court for half the activity, ours was not an easy assignment.I had to rely on the scorekeeper to know when to light the bonus and double-bonus indicators for the refs. He needed nothing from me. We were individuals, not a team, in tracking the score. As is not surprising, during one game our scores were different. Additionally, he was confused on individual fouls and team fouls, which understandably frustrated coaches. He wanted silence, except when he asked me a question, so he could concentrate. I wanted to verbally verify which team scored so we could stay aligned. That volunteer and I never became a team. We went through the forming and storming stages, but never reached norming or performing. The refs had the same challenge. They were to perform as a team, but were thrown into the game together just as my fellow volunteer and I were. All 4 of us should have been a single team, but instead we behaved as 4 individuals each trying to do a good job. No one with bad intentions.My second day I had the paper detailed scorekeeper job. My "table-mate" for that day and I had about 5 minutes before our games started. We talked about how to work together, she trained me on my new job, explaining "little tricks" that make it easier. Our team of refs had worked together before. We talked with the refs about how they could help make our jobs easier, and vice-versa. While far from perfect, the four of us were a fairly effective team. When creating a small team to accomplish a task, plan time for them to get to know one another, discuss roles and responsibilities, and agree on operating guidelines. No matter how smart, how experienced, or how caring they are as individuals, they will not suddenly become a team just because the game has started.

A majority of adult Americans do not vote in our elections. Why is that? Simply because they don't believe their vote matters. They believe nothing will change anyway.Voting within your company happens. Any idea what the participation rates are? They are 100%, regardless. Some votes are simply more visible than others.Why do some not vote in other countries? One recent Russian immigrant told me he never voted in Russia because he didn't want to vote to support the existing government and he didn't want to be caught voting for anyone else.Voting in your company can be accomplished by leaving, or by staying.The vote of staying may well be that of the Russian man or our unregistered and nonparticipative voters. If staying is a real vote it includes speaking up and the belief that input and ideas will be considered.In elections we want to believe that our side may not win, but our vote counts. In companies, it's the same thing.How long is the line to vote within your organization? If turnout appears low, you know why.

An effective operation may have bad days, but they are a rarity. When you walk through operations, is the angst palpable? Clearly that swamp monster environment should be prevented, but it may happen anyway. How many times and for how long do you find that operational stress acceptable? How many times and for how long do your employees tolerate it? Is meaningful progress being made and are employees involved in that? Manhandling a mess may shape-change the mess, but it won't replace it with effective operations. Throwing resources at a problem may feel good but won't get to root cause.With an intention to "do something" executives can be tempted to dig in with their pre-leadership topic expertise. But seriously, does that make anything better for tomorrow? Leaders must successfully transition their thinking from tactical to strategic. Brainstorming is one thing; relying on leaders to provide tactical solutions in another entirely.You can't be sucked into the swamp monster without your permission. If you are expediting, something is dreadfully wrong. If you're doing nothing long term of substance to kill the monster and prevent his return, something is dreadfully wrong.Your job is not to expedite, not to do the jobs of others, nor to hope things will get better. Your job is to anticipate, invest, and ensure others have what they need for success. It is routine for every employee to be aware of both problematic patterns and desirable patterns in effective operations. It is routine for those same employees to develop and implement fixes, prevent re-occurrence, or reinforce positive patterns through root cause problem solving.When, for whatever reason, that is not happening, leadership has failed. Or has not yet succeeded. With that description as the objective, leadership must prioritize observing patterns and the processes to succeed within them: processes that exist, those that are not functioning well, those that should exist but don't, and those that exist but shouldn't. If you can't bring greater value to your organization by thinking, guiding, providing course correction, and giving the team what it needs than you can by taping boxes or carrying paperwork, your business needs a new leader.Thinking may not look or feel like work, but it is usually the most important work a leader can do. Arm wrestling the swamp monster is not work, but it is exhausting.

Even the best of us can benefit from cold water to the face occasionally. In mid-2022 I finally quit making excuses and enjoyed a 3-week trip to Greece, Türkiye, Montenegro, Croatia, Italy and Slovenia. What shook me out of my "I don't want to contract Covid" inaction was a friend's story that he had recently returned from the Polish-Ukranian border assisting refugees.Fully vaccinated and masked, why was I sitting on my hands? If I drive a car, walk across the street, and eat indoors at restaurants, what was my excuse for not “risking” travel? My colleague's matter-of-fact response to my “done anything interesting lately?” query was cold water in my face. I have since taken several trips and enjoyed each. Thank goodness for that cold water in my face. It is easy to become complacent, over-estimate our current mastery, or let the potential downside of an action corner us into inaction. Those are rarely the mark of leadership we want to follow.Your supply chain was never a fully visualized well-oiled machine. Pre-Covid, you struggled to attract the workforce you want and need. Customer expectations were never stagnant. Investing in building muscle is an ages old demand. Details may be different now but taking decisive action to make giant leaps forward is an ongoing requirement of any business.Consider these questions:Supply Chain – What specific steps have you taken:to simplify?to increase responsiveness and resilience?to rationalize products, parts, and suppliers?to enhance multi-level visibility?People – What specific steps have you takento remove toxic employees, regardless of their skillsets?to capture and teach knowledge of departing workers?to respect employees as individuals with individual needs and goals?to emphasize characteristics rather than years of experience in new hires?to speed the effective onboarding to the company and to new roles?to develop training skills in knowledgeable employees?to gather and leverage diverse backgrounds?Strategy – How have you redefined yours to reflect current realities insupply chainpeopleglobal socioeconomicstechnical advancesconstituent expectations regarding ESG?I could ask each of you hundreds of questions specific to your industry, size, and market position. I could help you develop and implement decisions. But it is most important that you know it's time. Time to quit making excuses, quit reacting like a pinball, and quit waiting for “normal.” It's here.Your future is yours to create. It's time. Now dry that cold water off your face and start moving.

Excerpted From: © 2021 Manufacturing Mastery: The Path to Building Successful and Enduring Manufacturing Businesses; Taylor & Francis, Author: Rebecca Morgan"I have long advised clients that together we will identify and implement new strategic capabilities as quickly as they can handle. One of those strategic capabilities is always the ability to effectively create and integrate value-adding change more and more rapidly. Why would any business choose to improve its competitive position more slowly than it could? Changing faster than it can risks breaking the company. As leaders we must master walking that fine line as we advance it."What does breaking look like? "In the 1990s, Toyota decided to significantly expand its geographic footprint and number of operations. Unfortunately, it did so faster than it could effectively embed its business operating system, extraordinary design thinking, and expectations of working towards perfection in the new operations. That growth-oriented decision diluted those critical aspects of the company's success worldwide. Its internal process performance standards effectively fell. Quality problems arose and other challenges, though less obvious to the customer, continue. Breaking doesn't have to mean close up shop, but it certainly means a turn for the worse..."Reacting with an on/off mindset–changing everything or changing nothing–fails without exception. Go fast, but not too fast. It is the leader's responsibility to ensure that the organization responds smoothly to the requirements of change. At any point, an organization has a maximum rate of healthy velocity and then acceleration. To prevent breaking, leaders must establish a governor to ensure it is not exceeded. As the organization gains agility, the cap increases, and the business changes to reach the new capability. Finding that sweet spot is a requisite skill for leaders to constantly build and adapt." https://www.mfgmastery.com

Your people are no doubt working hard to do a good job. The question is: Have you given enough structure for them to know what a good job really means?Usually the weakness in that is a lack of sequenced priorities from leadership. How do they even know if they're working on something that matters?Employees cannot make good decisions if management cannot sequence the list of multiple priorities. Giving employees a list of more than one priority, without sequencing, abdicates responsibility.If you can't decide what's important, how can they?It is typically the unreasonable fear of leaders that nothing other than Priority #1 will be worked on if we let them know it's most important.Let me ask you: Would that be so bad? If every single employee can make #1 move closer to the finish line right now, why would you want them to work on something else right now?I've yet to see an organization in which every single employee could positively impact the top single priority at all times. Have you?By providing all employees with a sequenced list of a handful of priorities, each is positioned to make better decisions every single day.If I can't move #1 along, I should work on #2; if I can't move #2 forward, I should work on #3; etc. The fear that employees will do absolutely nothing if they can't work on Priority #1 is silly. Think how powerful it is for your leadership team to help each employee see how their work supports priorities. The goal is not for all of your employees to stay busy. The goal is for each employee to contribute to organizational and personal success by working on what matters most.Isn't that the purpose of strategy?

While the worst of the supply chain fiasco of 2020-2022 is behind us, elements certainly continue to challenge us daily. What we should have done then and what we can do now is communicate the truth among our supply matrix.We call it a supply chain, but the reality is all players in it service other customers and many of them serve other markets. The increasing number of variables due to that fact makes coordination even more critical to effective capacity management.Supply chain personnel have been expediting since before it was called Materials Management. In early 2020 most of us fell into one of two camps: the first faced a precipitous decline in demand which mean de-expedite everything; the second saw skyrocketing demand, which we chose to address by expediting everything. Strong supply chain competency is like beautiful choreography. It leverages what each participant does best, blending together variables to create something beautiful. Every choreographer knows it only detracts to have dancers enter the stage before they are needed. Yet in most supply chain efforts, we continue to fall back on expediting -- getting parts and materials before we need them -- when the going gets tough. It is a perfect example of confusing motion with results.Dancers must trust one another and the choreographer; the same is true of the best supply matrices. Honesty enables better decision-making by all of us.Coordinated conversations with suppliers that are struggling to provide materials when you want them can determine what the group can actually do. Which part/supplier is the key to getting this all moving? Knowing that is crucial to wisely leveraging capacity. Understanding what other parts can then be delayed -- even though we wish we had everything right now -- until that key part can be received from that supplier helps prioritization throughout. Demanding more or earlier hurts supplier prioritization with no offsetting benefit.The hesitation in doing this is a lack of trust. We're not sure we actually know what we need when and that our own production planning is that precise. We don't trust all our suppliers to actually ship "our" material to someone else right now and replace it to us at the agreed-upon date.When everyone is lying we're all hurt. When everyone is telling the truth but we don't trust them, we're all hurt. Supplier selection and development is an integral part of operations management. Done well, coordination and communication the last few years has been strong, even if not what any of us wanted to hear. We could jointly plan, and execute.Not done well, expediting is your strategy. Your dance floor is cluttered with excess dancers who have no current role.

Wouldn't you love to see an organization that was fully aligned across all functional arenas? We talk about specific excellence, like Nordstrom and service or Amazon and speed, but do you know of any organizations in which every single person in every corner of the company is aligned on organizational priorities and strategies? Do you think Nordstrom and Amazon are fully aligned internally?The "town hall" meeting in which you communicate the current strategy via PowerPoint slides is ineffective in describing the strategy, as well as ineffective in generating alignment. After you leave that room employees will still be operating at cross purposes. Not because they are bad people, but because the work and decisions that their jobs require are not integrated.Ask each member of your leadership team to separately use one side of one piece of 8-1/2" X 11" paper to specify the following headings:Summary of your businessMission/VisionCore ValuesKey Elements of Current StrategyTop Current Functional Challenges/DecisionsHow This Year Will Be Different From LastUntil they can do that and agree on the responses, alignment is impossible for the rest of your organization. Next, verify that the responses to #4 are consistent with #1, #2, and #3. If they are not, silos are the least of your problems.Now, agree on how #5 integrates with #4.Lastly, to make this actionable and aligned, agree on the bullet points under #6 that are the expected result of executing #4 and #5. If you and your team cannot do that, it's time to change the strategy.You and each individual on your leadership team should be able to complete the above assignment before your first coffee break. With each leader referring to this "charter for the year" daily as discussing priorities, actions, and decisions with their staff, alignment is possible. Using it without exception will create alignment. Silos are not the problem.Unaligned leaders are.

In the late 1970s, Ken Olson, co-founder of Digital Equipment Corporation (DEC), and Bill Gates, founder of Microsoft, had very different predictions for the future of computers. Mr. Gates gave his new company the mission of "every desk, every home" while Mr. Olson said there was no reason for a home to ever have a computer.How could two leaders of the early computer hardware and software industries see the future so differently? The art of the possible is indeed an art, not a science. While science may well be the enabling factor, it is a different thinking process to envision possibility.Drones are not brand new. The underlying technologies of drones have rapidly advanced as enclosed and tight spaces coupled with long distance and larger payloads have made the possibilities economically significant. We hear about drones being a lower cost option for the last mile as we see them mapping power company right-of-ways and blowing up buildings in real war. IKEA uses 100s of drones in its European operations, many to record inventory during off-hours. Your manufacturing or distribution company can no doubt leverage drone technologies; the question is "should it?" Is your view of the potential of drones more Bill Gates or more Ken Olson?Unless you are in the drone business, it's not your job to envision all the possibilities drones offer. It is your job to assess internal and supply chain work and understand where automation could improve safety, speed, quality or cost. Drones are simply one technology.To prod your imagination, it is time well spent to read business articles on how various organizations are using technology. Drones are no longer toys, nor is virtual or augmented reality. They can reduce or eliminate key challenges for you.The possibilities are endless. Current drone technologies may offer amazing improvement to your business operations. Or not. Always lead with the business question, not with the technology answer.

In my lifetime the US economy has experienced bank and savings and loan failures, inflation and full employment, a 20% prime rate and a Fed Funds rate of 0.0%, multiple recessions, and wild political swings in tariffs, tax rates, and regulations.In my lifetime, my country has participated in many wars, eradicated some diseases, had a pandemic, and experienced thousands of large protests for various causes. In my lifetime, travel became common, gadgetry a life requirement, and our lives have assumed those of the Jetsons. Most industry business models have changed significantly.Those examples include evolution, the exceptional, and revolution. And I'm not all that old!Creating the culture and context for successfully navigating all types of external jolts is a requirement of building an enduring business.Clear mission, vision, and core values are integral to the process. So too is alignment. Clear roles and responsibilities for anticipating and addressing or creating these various types of change is required.What types of risk assessment are the responsibility of your top management? Your mid-level management? Your individual contributors? Each of your employees has a different perspective, a different view, and a different ability to foresee, address, or create change. We don't expect the CNC operator to advise leadership of potential supplier failures or interest rate hikes; we don't expect the CEO to anticipate power or water outages.Does your risk management process reflect those realities?Reactionary is better than uniformed. Prepared with thinking and context for reactions is significantly better still. Regardless of what you do, the hits will just keep on coming. You might as well learn how to duck.

As fast as the world turns these days, it is not easy to stay abreast of the latest concepts and management trends. While it is important that you not let the world pass you by, it is also valuable to leverage some tried-and-true tools.TWI (Training Within Industry) and the Coaching and Improvement Katas are behavioral tools that can increase the effectiveness of your entire team quickly and safely.If you've ever taken a martial arts class, you've been introduced to the concept of kata. The term itself refers to a process repeated reliably to enhance mastery. The same is true for the coaching and improvement katas. While deceptively simple, as with any of the martial arts, detailed regular practice under the watchful eye of an expert is integral to proficiency. Both of these katas share the same thinking, but the detailed steps are different. That's the same as the katas for two varieties of the martial arts.TWI is a tool developed by the US federal government at the early stages of WW2 to get the new female workforce productive quickly and safely. The men experienced in manufacturing had gone to war, and women had to step into those roles. Rosie the Riveter was born. There are multiple aspects of TWI, each consistent with the other and each designed for specific purpose. Again, conceptually, this is similar to kata. It is worth investing some time watching a few YouTube videos and reading summaries of the distinct purpose of each form of TWI. While TWI is fully in the public domain, reading the original government documentation is not fun nor particularly helpful. That's why I recommend searching for more modern overviews.Other than training, neither TWI nor Kata requires a financial investment. Both can rapidly enhance the safety and quality of your workforce as they work to master and improve your business operations.Yes, innovation is crucial to success. But, no, that does not mean jettisoning the already-existing and proven tools.

You've all heard that great strategy with poor execution is no better than poor strategy with great execution. Operational effectiveness requires excellence in both levels.My writings and podcasts have long focused on the strategic aspects of operations, specifically how to build a manufacturing business that endures. This episode reminds the listener of the laws of math and physics that impact near term execution.The book Factory Physics was written about 30 years ago, and updated several times since. Its primary intent continues to be for undergraduate and graduate students in Operations Management.To overlook its value for production leaders, plant managers, and financial leaders in manufacturing operations is a mistake.Most of you are likely familiar with multiple order quantity formulas, from EOQ to Kanban, even if you've only seen them as options in your ERP system. Any order quantity formula impacts operational effectiveness, as it is designed to determine inventory levels and scheduling.It can be overwhelming, and seem to require great judgement, to determine what to do next on what machine or with which supplier. The more inventory you see the uglier it gets. There are laws of math and physics that are true whether or not recognized. Those fundamentals can help you make better decisions, lowering costs and increasing throughput and on-time delivery.Batch size, equipment utilization, and work-in-progress inventory are all integrated. When the boss insists on high utilization because he wants to absorb overhead, he may not understand the secondary impacts on inventory, throughput and lead-time. You should. And a good boss does as well.As someone who worked her way up through shop floor operations to plant and divisional operations, I've found understanding the details required by operational execution to be of great value in setting strategy. No, I can't write out most of the equations without help anymore, but I know the concepts and what drives them.If you want to enhance the quality of your operations strategy thinking, don't turn your back on Factory Physics.

Partner. Relationship business. It all sounds so good. But then reality slaps you up the side of the head.In a true partnership, can one company unilaterally change the terms of the contract?Well, no. But then few espoused partnerships are true partnerships.The larger company always has more money for lawyers, if it comes to that. The money they use to pay those lawyers may well be yours, which only makes it worse. The smaller company can also have a finger on the trigger. While meeting at high noon in front of the saloon is never the intention, it can happen. That's why fact-finding and intention-testing up front is a fundamental first step to enabling a trusting relationship to develop.Automotive has a bad reputation for harming small suppliers because the OEMs feel free to make unilateral demands and contract changes with abandon. Toyota and Honda are well-known exceptions to that and Hyundai has a history of being pretty honorable also. But the "big 3?" Keep your hand on your wallet.Those are hardly the only companies and automotive is hardly the only industry where the voiced commitment to a partnership that reflects a commitment to relationship is Vanilla Ice.But small suppliers or customers do not need to be as vulnerable as they often choose to believe and act. Don't get sucked in by the allure of business-altering volumes, because they may well alter your business in ways you don't intend.Before signing a contract, discuss with the potential supply chain partner scenarios that range from somewhat likely to probable. Ask how they have behaved in the past when those situations have arisen, and then talk with their other partners to see how well the two descriptions match.You, too, must open the kimono, and share what scenarios have challenged you to comply with your commitments and how you've handled those scenarios. If your large company potential partner has a track record of using its "relationships" to finance its cash flow, or to reduce its cost of goods sold by whatever number its CFO demands by pushing that responsibility down to you, there's trouble in River City. And that's trouble with a capital T. Teamwork starts with a very different T.Every business runs into challenges, sometimes severe. Pretending it won't happen is silly. Developing a common understanding of how you will treat one another, what kind of actions you'll each be willing to take if needed to help the other, being transparent about how you each define integrity and ethics -- those conversations are fundamental to any opportunity to build a true partnership.The fear of laying cards on the table indicates a problem from the beginning. Maybe you'll both be served well by a few short term purchase orders -- and yes that can impact costs for both of you -- before making the long term agreement. As Ronald Reagan said about Russia, "trust, but verify."

I've invested the vast majority of my long career in operations. I find it fascinating.Regardless of industry, operations includes the technologies, processes, materials, and procedures that delivering value on each order involves. Many would look at those words and see no similarities between making mac and cheese for millions of consumers and making aerospace parts for a limited number of engines.Yet my transition from operations of the first to the second was fast and easier than you might imagine.I am NOT a technologist. Making frozen prepared foods I worked with food scientists. Making aerospace parts I worked with metallurgists and ceramicists.I AM a business and operations expert. Both food and aerospace industries, and I could give many more examples, must obtain and keep customers, must know what materials are needed when, what critical steps are involved in converting those materials to the end product sold to the customer, and must comply with regulations while delivering cost effective quality reliably.The choreography of information, materials, equipment and decisions is one giant puzzle to be solved. The production system is what solves that puzzle.Many manufacturing businesses see the complications and distinctions that can make their operations difficult. The better ones focus on the similarities, simplifications, and apply lessons from everyone in their improvement processes.Both leaders and shop floor employees of the majority of, for example, tool and die companies believe that they are job shops, that every order is unique, and that because of those two facts there is no production system that makes delivery times reliable. Internal scheduling for them is one reaction to the last customer call after another.That thinking is simply wrong, and contributed heavily to outsourcing tool and die production to cheap labor markets.While the intricate details of the metal removed from the block of steel to create the specific shape required by the customer do differ, that is a very small part of the program that controls cutting.The production systems of tool and die shops are basically buy metal, write program(s) for the specific equipment that will cut the metal to shape, set up the machine, run the program, perhaps do a few secondary operations, and get it to the customer.I have helped many job shops, including tool and die, incorporate visual factory concepts and simple scheduling easy to follow, resulting in 50% reductions in lead-times and doubling of on-time delivery to customers. And of course profits skyrocketed.How? By seeing the similarities and not being controlled by the distinctions.Restaurants, hair salons, and tool and die shops are all job shops. All of them do the same things over and over, with the intricate details changing but not the overall production systems.As someone in operations, it is crucial that you understand the questions the system must answer, the challenges it must overcome, and the repetitive nature of the vast majority of both. The 80/20 rule is powerful, especially when we learn widely from the 80% that you share with the rest of the world.If you like putting together a puzzle, designing beautiful choreography that is easy for all the dancers to follow, or generally making it easy for others to do their jobs well, operations is for you. Don't let the varieties of production systems in existence become confusing. Take the best from each and create operations in your business that are the best you can make them, as of now.Tomorrow is a new and better today if we respect important differences, while we focus on similarities and learning.

We manufacturers know that we are responsible for the outputs of cost, quality, product performance and delivery; we also know that many others in our organization impact those as much as we do.Being outstanding in those four outputs is necessary but not sufficient for our futures.In recent years we've come to realize that the definition of outstanding for each of those outputs is more demanding than previously. And yet, they are still not enough.The three additional outputs of your operations to consider today are flexibility, innovativeness, and resilience. Flexibility does not mean jump through hoops to respond to the latest customer call. It no longer is limited to volume and mix changes in order patterns. It means your production and operational systems are designed to be flexible in meeting market needs and expectations. Consider the flexibility those who shifted from making airplane parts to ventilator parts in a matter of days.Innovativeness does not mean bringing more products to market each year than your competitor does. It means a culture that exudes problem solving mastery in every aspect of the business. After all, innovation is, at its core, problem solving for the future. Resilience does not mean reactionary. It means identifying and preparing for the risks that matter most and being positioned throughout the organization to rebound from whatever happens. Each of these three outputs requires systemic thinking, processes designed to deliver them, and a culture that does not question their importance or the changes they require.We've all heard "raise the bar." That isn't limited to raising required scores on what you've always measured. Sometimes it means changing the bar entirely.

Why are some manufacturing businesses a hot mess, while others are a great place to work as you provide exciting value to the market?A business is a living organism, and as such, understanding what makes them healthy and what makes them sick is instrumental to success. Here are seven levers that apply within all manufacturers; each is addressed as part of the operations strategy, which is in place to execute the business strategy. The business is impacted by each, both individually and collectively.The first is Human Resources. What is the strategy for how many, what backgrounds, what key characteristics? An effective HR strategy is not reactive, but rather reflects the quality of the organization you are building.A second lever is organizational structure and role clarity. While we're all familiar with the one box at the top, with a few under it and a handful under each of those, going on down, that is hardly the only potential structure. Even if that is the best one for you right now, that structure unsupported by clarity for each role will fail you. Titles mean different things to different people; providing common understanding of expectations of specific roles and among roles cannot be overlooked.A third lever is production planning and control; this is the near-term management of inventories and resource utilization, and drives costs, time, and performance.Sourcing is another impactful lever in your manufacturing business. The decisions to outsource or insource, off-shore or near-shore, leverage supplier expertise or not require strategic guidance.Both process technology and facilities are structural levers that are often difficult to change, impact cash availability, and can add costs and time that are difficult to assess.Product design is the 7th lever addressed today. Product design was once a matter of meeting customer specs. The long term impact of that design has been recognized, resulting in design for manufacturing, design for service, design for re-use, and additional DFX.Those manufacturers that are a hot mess don't manage or strategize these levers well; they may not even recognized their existence beyond daily headaches.Outstanding high quality manufacturers think strategically about each of these levers, never considers the position of any of them optimal forever, understands that each has an individual impact, and recognizes that the collective impact of mastering each of these creates the foundation of a high quality business.No manufacturing business can afford to overlook the consequences of the position of these seven decisive levers.

Manufacturing has played a major role over time in advancing automation, computerization, digitization, and more. Our industries are amazingly different now than they were 15 years ago, much less 30.In December of 2022 the company OpenAI released an online product called ChatGPT. Unless you're living under a rock, you've at least heard of it. You may not understand what it does, and very few understand how it works. It is, however taking the world by storm.The question for you is, does ChatGPT offer value to manufacturers?The short answer is: No, at least not yet. But the longer answer is: The literally awesome advances in Artificial Intelligence (AI) reflected in the technical underpinnings of the product lay the groundwork for a very different future for all of us. Importantly it should reassure us that parallel efforts building AI capabilities to solve other larger problems are advancing quickly also.So why do I believe ChatGPT does not help us manufacturers now? Because it suffers from a problem that all AI will need to overcome: What is the truth used as the basis of its advancing logic and reasoning?A recent LinkedIn post bragged about the great answer received from ChatGPT when asked to distinguish lean from six-sigma. The problem is, the answer was significantly inaccurate. How can that happen? Alleged experts have to guide the AI tool's initial learning in understanding what is true and what is not true. As it trains itself on logic/reasoning from that information, it receives continued guidance, though less and less as its training is judged to be high quality.This product is not just a fancy Google search engine. In fact it relies heavily on the quality of the information it considers, while Google merely spits back links to what it sees as relevant web content.How does a manufacturing leader, who obviously has a plate full already, consider the ever evolving technologies arising daily?In larger organizations with better trained technical experts, she can build in regular updates from those people regarding what is happening and why she should care. Reading, asking trusted peers, following respected sources on YouTube or other social media, and attending technical conferences for leaders are a few methods to consider. Smaller company leaders may choose not to invest resources in this research, strategically behaving as "late adopters."Any advance others are leveraging to increase competencies should not be a surprise to you, as the leader of your organization. Know terms and a one paragraph summary of definition, and what makes it special, including strengths and limitations.You can insource or outsource development of that information, but having it is not optional. Well, it is optional, but not for those building companies to endure.Invest 5 minutes setting up your ChatGPT account, realize that it handles statements or directives better than it does questions, and try it out for a few topics of importance to you.If you see capabilities that can help you now, invest more resources; if not, move off of this advance for now. You can't implement every technology advance, nor should you. Some of the non-tech advances may be of greater value. You may already have all the change you can swallow.Please don't be an ostrich, though the temptation may be great.

There are business buzzwords, and then there are important business concepts you cannot afford to ignore. Resilience is one of the latter.Resilience emanates from effective risk management. If you don't have a viable and ongoing risk management process, start there. In risk management, the first steps are always to identify the majority of risks, assign each probability and severity, and through that scoring list them in order from highest to lowest. That guides the priorities of risk management. Resilience is not about being reactive, but rather about executing plans already in place to mitigate damage and get back on your feet quickly and effectively.For example, succession planning will make an organization more resilient; replacement planning does not. The distinction? Succession planning is a process to reduce or eliminate significant downside of a key person leaving. Replacement planning means once an employee leaves you tell HR to find someone to take their place. The former involves effective planning to minimize negative impact in advance of a risk occurring; the latter is a reaction to something that has occurred. The former is evidence of a more resilient organization, the latter of a reactive organization.Resilience is not a magic elixir. It is easy to observe before it is needed. It is part of running a healthy and enduring business. For you former Boy or Girl Scouts, it is simply: Be Prepared.

It was not that long ago that most manufacturers and distributors carried entirely too much inventory. The drag on cash flow was never offset by lower costs or higher performance. When we figured that out, we began to lower inventories.By adding some technology, whether RFID or barcodes or enhanced ERP software, we made it easier to reduce inventories and increase performance. By beginning to pay attention to some of the concepts of the Toyota Production System we put in visual pull systems that enabled us to continue to reduce costs and increase performance.But by never truly understanding what we were doing, when significant supply chain disruptions hit world-wide, we blamed our tool (allegedly JIT). We overreacted by issuing mass orders at whatever price the market would charge. There we were. Back more than a decade ago with the same miserable results.Please stop building inventory!All of the problems and downsides of large inventories remain. Missing a single part still prevents outstanding performance with your customers. Canceling all the blanket orders you placed for "as many as you can get us" in no way represents operational excellence.A significant number of industries have replicated the wild pendulum swings of electronics, and now the electronics industry has joined that insanity again. Coupled with tax incentives and a tilt toward nationalism, chip plants are under construction everywhere. It's not hard to foresee trouble approaching. Those who truly understand "lean thinking" didn't react to the supply chain disruptions by jacking up orders for everything and issuing customer delivery promises of "god only knows." True supply chain partnerships would have had multi-party conversations about who needed what first to actually ship products, not to just have more inventory of something sitting waiting for something else. Coopetition based on reasonably accurate inventory data and shared supplier production capacities can get everyone up and running much more quickly than threats will. It is a very rare sub-industry that was willing to execute that.Trust and transparency facilitate playing nice; without those, it's every man for himself, which means we all fail.Please stop building inventory. Invest those resources in actually learning what true operational excellence requires, and making the necessary changes.It is easy to recognize those who had firmly embedded Delusional Excellence®️ instead of the real thing.

Strategy is one of those important business concepts that many cannot recognize, develop or implement, yet businesses that endure have mastered."Growth" is not a strategy, nor is "increase profits." Those are goals or objectives. Strategy describes the boundaries, priorities and activities within which those will be achieved. For example, a growth goal may have a supporting strategy of selling more to current customers, expanding geographically or into adjacent markets, or reliable introduction of new products that deliver more value to the the current market. Or, obviously, many other intentions.It is common to share goals and objectives throughout the organization, if only in general terms. It is much less common to share strategies. That, my friend, is a trait of failure.Any viable strategy includes insights from up, down, and across the organization, as well as from all five of the company's constituencies. Execution of any strategy requires comprehension of its intent and constraints up, down, and across the organization -- plus the resources required.Any employee or business constituent who does not understand the strategy at some level and recognize his role in implementing it successfully cannot be expected to act consistently with it. If you're asking "what was he thinking?" chances are he was thinking about how best to do his job with the information at hand. Strategy awareness and comprehension of how his actions and decisions impact its execution is as fundamental to success as is how to enter an order or label a package. How do you build that strategic mindset throughout your organization?First, build your own strategic thinking muscles. Titles don't convey skills. A CEO cannot, by mere acceptance of the title, think strategically. A shipping clerk, by mere acceptance of the title, is not limited in thinking strategically. A strategic mindset takes awareness, practice, development, discipline, and challenge.Next, as you talk with employees, regularly ask "how does this support the strategy?" Or "how does the strategy impact how you think about that?"Every act and decision by every employee is implementing the strategy, or not. Strategy is not an enacted by a group of leaders in a conference room. They will certainly discuss it, and challenges and opportunities to it that have arisen, but they cannot implement it alone. Connecting actions and decisions with the strategy is an ongoing responsibility of leadership. As the strategic mindset muscle is built throughout the organization, that responsibility permeates the entire business.Do not assume everyone knows or understands the strategy, or how it impacts their work. Do not present a PowerPoint of the strategy at a town hall meeting, and believe everyone knows and understands it and how it impacts their work. Constant communication up, down, and across is integral to developing your strategic mindset. Communication means both listen and talk, augmented by thinking.A company that can endure over time will build this muscle and keep it healthy.

The business model in manufacturing and distribution has long been own it, sell it, get paid for it. For most of those companies, it still is.But our world is changing. The concept of ownership has a very different place in our thinking, as does the concept of value. The potential enabled by rapidly advancing technology is integral in changing thinking about optimal business models.When I worked for Perdue Farms in the late 1970s, my first major assignment was to build and implement a feed formulation system that would meet nutrient requirements for the chickens at the lowest cost given potential ingredient inventories and market prices. Computers then weren't what they are now, but those calculations were easy to perform once the program was written and the inventory, nutrient, and market data for all potential ingredients were available to the model. Updating that information took time, time that is virtually zero now. Advanced technology didn't eliminate the need for the analysis, but made it much faster.That use of data was focused internally toward cost reduction. But the thinking can easily be turned externally to identify information incredibly valuable to the market. You've likely heard that airlines are not committed to owning jet engines; what they really want is reliable, fuel-efficient thrust on each of their planes. That means predictive maintenance, well-designed engines and valuable real-time analytics of data converted to information used in flight. And in the design of better engines in the future. Data from a single engine on a specific plane, from a type of engine on a number of planes, from a type of engine on a variety of types of planes, and more, is changing both current and future operations of the air travel industry. Do you care who owns the engines on the plane you're flying on today?We see personal and shared ownership of cars, no ownership of cars (Uber, taxis,), mass transportation, bicycles, walking, and more. The "best" business model depends on value as perceived by the target market, and on the providers ability to actually deliver that value. If instead of selling your products to customers, you will focus on the amazing value those products can provide, comprehension of real value is the crucial first step. Most of us are not close enough to our markets and do not listen well enough to truly understand that. And most of us struggle to eliminate the assumptions inherent in our thinking -- like "it's all about the product."To consider shifting to a subscription business model, your organization must have the awareness and thinking to understand value at every level. That model will not work for you or your customers unless it improves the value proposition for both. That value proposition must not be just a cute quote but a better business result for both for the long term.What promise could you make to your market that would entice it to shift to you? And equally important, what promise could you think and evolve quickly enough to keep all the time and forever?It's much easier to just make something and sell it, but only today. Tomorrow requires much more.

Are you a pneumatic tube operator?A COO is not a COO is not a COO. While the title Chief Operating Officer should indicate range of responsibilities, it does little to describe them.Same for a Buyer, a Plant Manager, or an New Product Development Manager.These titles have very different meanings in a $5M, a $100MM, and a $1B company. They also have very different responsibilities in a contract machine shop, a pharmaceutical business, and an international defense Tier 2 contractor.And they have different responsibilities and expectations as a single manufacturer or distributor changes volumes, markets, or ownership.The plant manager of a $50MM contract metal working company was in over his head as it grew to $75MM. He left to become the COO of a less than $10MM machine shop.So who is responsible for ensuring that an employee or team grows its competencies as the needs of the business change? Those needs change frequently and never decline. Even plummeting sales do not lessen compliance, performance, and competency expectations of the market. Lifelong learning is a great phrase, and a requirement of the culture embedded in any manufacturer who intends to endure. Daily constant learning is an even more important phrase and element of culture, as it implies lifelong.Each employee of every business owns responsibility for willingly learning and expanding skillsets and knowledge base. Each leader at any level owns that responsibility not only for herself, but for every member of her team.Keeping pace with today's needs is basic need. Anticipating and meeting tomorrow's requirements is an equally basic need.How do you know if the requirements of your job are changing faster than you are? Of your team? Of your entire business? Of your entire supply chain? Of all of your constituencies?Jobs do not stay the same. Careers do not either. If you go to work today to do the same things you did yesterday, come home, and go in again tomorrow to do the same things again, your company is in trouble, as is your job.Sadly, the Social Security Administration continues to use a list of active unskilled jobs that includes "pneumatic tube operator" in considering disability claims. Dowel inspector and shelling nuts are two other jobs it deems in significant numbers to decline benefits to people it believes could do those. Good luck finding one of those openings at a facility near you.How long until the job you currently perform is just another embarrassing kernel of the SSA list of plentiful unskilled opportunities?

When a recorded message for customers is considered a snide comment you've failed. Yet the way to fix that is not to prevent customers from calling you.Each day another company quietly moves from a call center to a contact center. That is the official method of precluding customers from actually talking with someone who could help them.While AI and bots are better than they were a year or two ago, they are still a long way from actually answering the majority of questions your customers have when they call.Data abounds to tell us the cost of customer churn, yet based on some accounting analysis we make decisions to reduce costs and increase churn. Yes, the last half of that sentence is an oxymoron.Looking at a P&L statement, it is much easier to see the costs of personnel who actually help customers than the cost of AI bots that chase them away. To retain customers, operations must deliver on promises made and additional expectations of the market. Attempted incoming communication by the market is a world of valuable information, if only we actually care. We can collect data on the reasons for calls, using analytics see trends and interrelations that aren't obvious, and get to root cause. If contact is repeatedly about status of an order, you can eliminate the majority of those calls through simple technology -- which many companies currently use. But problem orders -- for example those with a bad tracking number - must be identified and addressed. With no fast reliable means of getting the status from your company, the customer is likely to go elsewhere next time.The concepts of contact centers instead of call centers, and bots instead of humans, are some of the most expensive ideas we've implemented of late. Not only irritating to customers, they fail to capture valuable information that points to root cause. By ignoring root cause, you fail to actually fix the problems that initiate the calls. If any attempt by a customer to get information from you is important to you, use humans trained to answer questions. Make them quickly available through a multitude of means, including actual human-to-human conversation.And get to root cause and fix it.

The Cleveland Clinic is widely recognized as one of the best medical systems in the world. And its delivery of medical services deserves that recognition.But its costs are unnecessarily high, its critical medical resources wasted, and its doctors and patients needlessly irritated by its short-sighted approach to scheduling. Scheduling, an organizational weakness since the mid-1970s based on my own experience, appears to be viewed as a cost center rather than the path to effectiveness.The Clinic has long used schedulers with no knowledge whatsoever of medical professions. Rather than train and educate, the powers that be prefer schedulers who waste the time of doctors and patients and physical resources by scheduling with the wrong professionals.There is a significant difference between a cardiologist and a electro-physiologist cardiologist. There is a significant difference between a retina specialist and an ophthalmologist. But the schedulers don't understand those terms and schedule patients accordingly. And on it goes. Now the Clinic is reducing costs by not printing after-visit summaries when the patient leaves.Those should have never been printed in the first place for any patients comfortable with MyChart, the online capability and app that includes all that information. HIPPA laws focus on confidentiality, but needlessly printing confidential paperwork for patients who then accidentally leave it in the bathroom or at Starbucks is below mediocre.Your manufacturing business must make high quality products and deliver them to your customers in the quantity and elapsed time that the market demands. That's a given. That's the equivalent of the Clinic delivering excellent care.But, like the Clinic, your business has supporting processes that are required. Those are often the source of high costs, time-burning organizational friction, and the waste of critical resources. Mediocrity in those support processes can cost your business its future. I've served leaders of manufacturing companies with my strategic insights and experience for over 30 years. I am not an engineer and have never been able to explain how to make a machine run faster. But that is never the primary problem preventing excellence in a manufacturing business. If you believe it is your major obstacle, hire an engineer to work on that. Be warned, your business will not thrive because you took that action. Nor will the Clinic thrive by ordering physicians to see more patients in an hour. Mediocrity in support processes will betray any excellence products and services offer.

A number of manufacturers have announced plans to leave China, primarily due to the upheaval in Hong Kong and impacts of the government's "zero covid" policy. But what's the destination?If a leader does not completely understand why his operations strategy involves leaving one location for another, how will success be measured?Vietnam, the Philippines, Indonesia, and other popular southeast Asian manufacturing locations may be little better than China. Government uncertainly? Port challenges? Distance from major markets?Before moving operations from or to anywhere, begin with a clear understanding of "why?" What problems are you trying to overcome, or what benefits do you intend to gain? What risks become higher, and which become lower?Manufacturers left the United States in search of cheap labor because they didn't know how else to be cost competitive with new foreign competition. Standard accounting reports made direct labor an obvious target, and gave operations leadership an easy out. Why not hold them accountable for reducing costs without moving operations?Most leadership thinks in terms of 5% improvements, not 50% improvement. That's a leadership problem facilitated by accounting and by business schools.As you consider leaving China, or Russia, or any other location, define the objectives of success.When first moving to China, did you consider the obvious risk of the extended supply chain? Apparently not, or it was one you accepted.Some decisions result in negative impacts that were acceptable risk. Decisions that result in negative impacts because obvious risks were ignored reflect poor leadership. Decisions that are defined by actions (e.g., "leave China") without examining alternatives thoroughly are, except in case of true emergency, poor leadership.If you plan to move your operations out of China, where will you move them to?Why?

As we advanced from craftsmen through the industrial revolution, Henry Ford decided the best way to make automobiles was a 100% vertically integrated business model. In 1917 his River Rouge plant brought in iron ore at one end, and shipped out finished cars at the other. That's one type of supply chain, one he found very difficult to execute.Most of us used the term "purchasing" to describe locating, buying, and bringing in the materials and components required to make our products. Buyer, Senior Buyers, Buyer-Planners, and Purchasing Director jobs became plentiful. And, for the most part, clerical.In the late 1900s we decide to "upskill" -- at least the term -- and refer to those people as Supply Chain. The work remained largely unchanged, but the term sounded good. We described the suppliers involved down one level to infinity as our supply chain. We knew from professional education that "supply chain" spanned from our suppliers' suppliers to our customer's customers, but our thinking and behavior changed little.But with that definition the visual of an actual supply chain, with each company represented by a link, evolved. Surely there was a "weakest link" that we could focus on. But it was never that linear in either direction, unless you were Henry Ford in 1917.As economies developed and manufacturers grew, business became more complex. Buyers, regardless of current department titles, found suppliers with more regard for price and delivery than for simplicity or mutual advantage. We multi-sourced most items, and our suppliers did as well. That pretty visual of a supply chain in no way represented the supply mush that evolved. And now we want our supply chain, make that mush, to accept and design in responsibility for the environment, begetting the conceptual circular supply chain. The prior reality of each company handing of responsibility for the environment to its customer was simple. Unfortunately, it has left us with a big mess. So our supply mush has created an environmental mess, and we've discovered that we don't even have a clue about this "supply chain" concept we thought we were managing.Design for reuse is one concept that a company can use to individually reduce the impact of its product on our world. Accepting responsibility through the entire product life cylce -- and I don't mean cash cow cycle, but rather birth to death -- is an important concept, but one publicly held manufacturers are lax to pursue.Your job is not to create world peace. As a leader in a manufacturing organization, it is your responsibility to understand your current sourcing and value-delivery structures. Not only in theory, but in practice. Concepts like Total Cost of Ownership have been around for decades, but few actually use them in execution. If that TCO includes environmental impact, reluctance will only grow.The planet will be just fine. It is the human race that suffers from the short-sighted behaviors of humans and decisions they make as company leaders. It is time to become responsible adults. Understand your current material supply infrastructure. Define its success in terms of meeting the mission of your organization compatibly with core values. Determine the strategic supply infrastructure that best accomplishes that, and begin the transition. If your company is to endure, it cannot leave the world in worse shape than it found it. Standing as the last man on earth reporting quarterly earnings is not winning.

These are strange times for the workforce. Disney, the picture of stability, recently fired the CEO they had groomed for the job, and brought back prior CEO Bob Igor to set the ship straight again.At the same time, Elon Musk used the power of email to summarily fire 1,000s of employees as he told those who remained that hard work and long hours would be the only way they retain employment. More quit after receiving that threat.And of course however many employees FTX had found themselves amidst a huge scam and scramble to find new employment.Yet 100s of thousands of openings remain unfilled, as industries ranging from health care to manufacturing hospitality are unable to hire and retain good workers.What does that mean for you?It means, only as a highly visible reminder, that your career is a terrible thing to waste. You spend 1/3 of your life working from the ages of about 20 to about 70. Why waste your talent and why be miserable?If your replacement walked in the door tomorrow, what would you do? Why wait for that?First, if you enjoy your company and industry, you already know many of the improvements you would make to increase the contribution of your role to the organization. Make them. Don't sit back afraid. Do what you would do if you were your replacement.If you do not enjoy your company and industry, pursue alternatives. Is your resume current? Are you always considering other options, choosing to remain where you are?Your current role and company should be an intentional choice, not a result of laziness. Constantly being aware of your potential and where it can best be reached is a personal responsibility. You can say "no" to anything. Better to do so now than later.If you're happy, why not replace yourself?If you're not, why not replace someone else with someone better -- you!

In 2019 manufacturers were struggling to onboard and retain important workers, to obtain supplies when needed, and to meet the level of performance that customers demand. And then Covid hit."It's the supply chain" became the phrase to indicate the problems are out of our control. It meant "don't expect a good answer from us" and "don't expect on-time in-full deliveries."Packaging, whether plastic or metal or even treated cloth, was in short supply. At least in the size and configuration some needed.We all remember the toilet paper shortage, but how many understand that it due to a shift in demand from industrial to residential? The materials, production processes, packaging and shipping are very different for the two sources of demand.Chips continue to reflect inadequate supply; at least a few do. But others are in such surplus that major producers like Intel are laying off and putting the brakes on production as customers admit to hording and cancel the huge orders they had on the books. That industry -- the electronic parts industry in general -- has long been known for these huge swings. Those historical swings have been for very similar reasons. Rapidly increasing demand that can't be met; skyrocketing orders; skyrocketing production; and then cancelled over-ordering, and plummeting production. Because capacity cannot be quickly and smoothly adjusted in those industries, wild swings are simply "the way it is."While leadership concentrates on the strategic level, execution requires attention to detail. In conditions of multiple challenges confronting us simultaneously, we tend to simplify by relying on stereotypes, or generalities, that have no real meaning in execution."Chips are in short supply" or "plastics are in short supply" has little meaning at the detail level. There, the detail matters greatly. The strategic decisions of suppliers matter greatly. Leaders can help those involved in execution understand supplier strategies, talk with suppliers to better understand and perhaps shape those strategies, and think more strategically about how to manage any shortages. Expediting is NOT the answer.For decades manufacturers have maintained excess inventories of most items so they would always be able to produce something, but they have also been short one key component or material regardless. The excess inventories did little to quickly meet customer demand. The current return to "send me all you've got" will only take us back to prior conditions.Bills of material (BOMs) must be considered as a whole to effectively plan production. Analytics and accurate inventories, customer orders and even routings can enable optimization of output and honest communication with suppliers and customers. Expecting those in charge of near term planning and execution to optimize in their heads is ridiculous. Help them have the information they need, which is beyond mere data. That requires investment in technology far different from simple MRP calculations.Ask operations staff to explain the specific causes of any shortages -- geographic, processing, logistics, etc -- so you can help them think strategically about how to best leverage limited critical resources.During Covid, most of our supply chains operated just as they were designed. Poorly. Understanding sensitivities, variation in both signal and noise, and risk elements from global to a local bridge closing, is part of supply chain management. Issuing purchase orders is a task. Expediting is a task. Neither will resolve your current production problems. Motion and results are two entirely different things. A chip is not a chip.

My computer is running slow today. They keep moving things around here. Someone called off so I'm doing it all myself.And now, it's the supply chain.The computer excuse shouldn't have been accepted since about 2010, the moving things around excuse since hand-held devices, and the someone called off -- well, that one will likely be with us for decades to come.But the supply chain excuse? It's just like the computer running slowly. It was true at one time, but is rarely the case now. Yet, people still use it.Prior to Covid and the legitimate supply chain problems that followed, the majority of manufacturers would run out of one part while having too many of another. The quality of data in our systems was, and is, a significant cause. Poor mastery of the basics of operations management was, and is, another.We've had over 2-1/2 years to figure out how to plan for and manage supply challenges; we've had decades to improve the quality of our data and our mastery of operations management basics.Blaming others is much easier than acknowledging internal weaknesses, and saying 'we' rather than 'they' is much tougher. Would you rather hear "it's the supply chain, you know" or "they keep moving things around here?" Both are lame excuses. Both are efforts to minimize internal control and impact over business challenges. And neither does anything to help you.Do your employees use the term "we" when referring to something within the company's ecosystem, or "they?" Repeatedly I've asked "but aren't you part of the "they" you refer to?" That kind of accountability is rarely accepted.If each of us quit blaming unnamed third parties for our woes, we might actually prioritize addressing them.We weren't staying close enough with some of our key suppliers and were surprised by shifts in their abilities to deliver. We are addressing that now so you will soon be able to trust and believe our promises again.We failed to prioritize usage of short parts and communicate proactively with the customers impacted. We chased the holy grail of cheap labor all around the world and failed to comprehend the increased risk inherent in that.As we moved to supply outside China we failed to fully examine the new risks we were undertaking and continue to experience shortages and poor communication.Those four example admissions get closer to the real problems, each of which is ours to own and fix. "It's the supply chain" does nothing to identify or solve real problems.C'mon Man! Stop blaming your supply chain.

For going on a decade manufacturers have been complaining about a lack of skilled workers. Some have been very proactive in developing connections with trade schools, high schools, universities, and apprenticeship programs. Others choose to rely on internet software to take the process of identifying solid potential employees off internal resources. Some automation makes sense and works well. Other automation reduces workload for current employees, but does little to improve productive output.Is that software identifying the best for you? More likely it is rejecting highly qualified people who don't match the search criteria you specified.The United States brings in about 1,000,000 immigrants per year with an immediate green card and the right to work. Additionally, with recent international upset, the number of refugee immigrants has increased. Syrians, Iraqis and Afghans obviously make up a significant percentage of those, recently augmented by Ukrainians.Many of those immigrants were very productive citizens in their former homes and are intent on becoming the same here.But the universities on their resumes likely don't match the search requirements you've specified for your software. The job titles may not either. The format may not enable them to provide their full native name. If we put up enough obstacles, we can overlook Nobel prize winners.Every city of any size has one or more immigrant support centers to help arriving people find a place to stay and something to eat. Many teach English, both verbal and written, to those who need or want it. Are you aware of them? Have you researched that potential source of great workers?Like residents of this country, they struggle with child care as they seek work. If immigrants can figure out our culture, our business models, our legal and tax systems, surely we can figure out how to hire them legally.Chances are your legal resources are not immigration experts. Chances are anticipation of administrative burden of hiring an immigrant feels overwhelming, and is thus avoided. But chances are its much easier than you imagine.Chances are you could find some of the good workers you seek by looking other than where you always look.As Henry Ford once said, "“If you always do what you always did, you'll always get what you always got”.

In manufacturing we constantly talk about continuous improvement to move ever closer to excellence. But if we increase productivity by 5% per year, are we excellent?That, by itself, cannot answer the question. It says we're pretty good at reducing labor-related costs, but it tells us nothing about how well we meet the needs of the market.Most lean activities in most companies are focused on that reduction in labor content. Many also target a reduction in cash invested in inventory and delivery lead time to the customer. Let's say progress is made in each of those too. Is that company excellent? Again, they are making internal improvements that help them, but have they done anything to change how the market views them? Does the market truly need them to continue to grow?What does excellence mean to you? What does your market require of you to consider your company excellent? Do your suppliers consider you excellent? Do your employees work hard every day because of your passion for excellence that includes helping them live excellent lives? Does your community believe it is better off because of your existence there? Are you helping the school system become better every day?By confusing true excellence with cost reduction success, it is easy to self proclaim excellence to the world. But that excellence may not really matter.Excellence, like thought leader, is a term that is defined externally. Does your excellence really matter?

The coal industry did not change for decade after decade. Being forced to improve safety demanded exhaust systems, better lighting, and a bit more, but nothing too dramatic. That industry long believed that arguments for cleaner energy were a fad. After a while it became clear that was a trend. But was that enough to require any real change? Would there be a seismic shift? Yes. The current decade has hosted a seismic shift in the view of non-renewable sources of energy in general, and coal in particular. Yes, China and others continue to develop new coal mines, but China is also leading most of the world in bring renewable energy online. Yes, Europe will increase use of coal this winter due to the Russian war on Ukraine. But that shift is a short term necessity, not a new normal. So if you owned a coal mine, when would you have shifted your business strategy? In the 2000s? Perhaps not even now. Major players in oil and gas industries are both reacting to and creating a seismic shift in the supply of energy worldwide. The minor shifts are better management of methane; the major shifts are in creating new renewable capabilities. It appears that in the 2030s, EVs will be the new normal. The seismic shift is well underway. Some auto companies have been on that train for a long time, focused on battery development; others are quickly moving that direction right now. Combustion engines will be around for a long time, but their time is largely over. Think coal 30-40 years ago. Pelaton existed before Covid, but sales and service erupted from the 'work from home' and 'stay within your bubble' lifestyle shifts. That company announced plans to build a significant manufacturing plant in northwest Ohio. Ah, but staying out of gyms was not really the new normal. It was a temporary response to a pandemic. As sales plummeted, plans for new production were scuttled. Spending extensively on a new Pelaton was a trend, never to become a seismic shift. Where is your business on the continuum of fad to trend to seismic shift to new normal? Do you observe trends, developing products and services to create a seismic shift in the market around those you believe are long lasting? Or do you wait until someone else creates and verifies the shift before investing in market and product development for the new market expectations? Each of these strategic locations requires different competencies. Include this positioning in your strategy, clearly define and master the competencies that are required to succeed there, continually verify if your position is best for the longer term, and adjust as needed. Building an enduring manufacturing business requires commitment to the mission and constantly scanning the market to optimize your positioning strategy.

Maximizing current profits by definition sacrifices the long term investments that attaining your mission requires. My concept of "strategic profits" addresses how to think about profitability in a way that ensures you can always invest in the muscle instrumental toyour organization's long term success. First, can you identify those company muscles that are required now, and will be next year, next decade, and likely next century? If not, it's impossible to build strategic profits. And without strategic profits, your core muscles will get flabby quite quickly. For some, it may be the ability to forecast and react to the mix of short-shelf life requirements of your business. If you are trying to feed people high quality natural foods at an affordable price, that would make sense as at least one of the muscles you must build and always develop. For others, it may be the constant state of flux that a dependency on constant new product development requires. Does your mission demand that you continuously create new offerings? Then you cannot afford to forego investment in your NPD processes and capabilities, market and material research, and global challenges threatening your markets regardless of how tough times may be. Identify those very few muscles that underlie attainment of your mission, and think strategically about profit management to preclude risk to investing in them at all times. No one can afford to take a month or a year off from developing crucial muscles. For more insights into the concepts of strategic profits and building business muscle, contact Becky Morgan at Morgan_at_FulcrumCWI.com or get her book Manufacturing Mastery at Amazon.com or Barnes and Noble or wherever you buy your books.

Do you ever say "what was she thinking!" in exasperation? Most of us do. And if we're honest, we also ask "what was I thinking?" No one bats 1000 in making great decisions, but all of us can improve the quality of the decisions we make. And we can help others do the same. As leaders, we need to do both. A few easy-to-implement steps include asking these simple questions: 1) what happens if you are wrong? 2) what alternatives did you consider and reject? 3) what are the downsides of this decision? If you and your team ask yourselves these three questions when making any decision beyond snacks for the meeting, you'll find improved decision-making becoming your reality. This podcast includes a few other suggestions for you to consider. The important idea is that you not see poor decisions as a fact of life with no way out.

Following the inflation, high interest rates, and economic downturn of the late 1970s and early 1980s, American manufactures felt significant price pressures. They, wrongly, believed that offshoring production and sourcing to low wage rate countries was the only way to remain competitive. As they complicated the supply chain and extended lead times, they also began to listen to select parts of the Toyota Production System. Select, as in they chose to see Just-in-Time as reducing inventories rather than designing systems to meet customer demand just in time. The combination of offshoring, adding complexity, and reducing inventories locally was a bomb waiting to be lit. Covid did just that. So what are a number of US manufacturers doing now? They are swinging the pendulum back the other direction by jacking up inventories and relocating sourcing to the US. That makes no more sense now than the decisions to offshore made before. The unintended consequences are in most cases foreseeable, if only we look.We shipped middle class careers to other countries. Wage pressures in the United States are mounting as every industry faces labor shortages. Just how will re-shoring solve your problems now? When is the last time you spoke with "customer support" that is located in the United States? We outsourced our customer relationships to India -- an educated and English speaking country with low wage rates. Because services are less impacted by supply chain disruptions, no one is discussing moving that back to the US. While the thinking of businesses advances in some areas, in critical ones it seems to swing as a pendulum. Core competency, or vertical integration, or conglomerate? Look at the historical trends, and its easy to see the near future. Outsource, face a problem, then in-source. Lower inventories, run out of things, raise inventories. Where is the strategic problem prevention and solution? Going back to what we used to do may be quick and comforting, but that doesn't make it wise. If you haven't developed a robust supplier selection and development process over the past decade, you'll regret making changes now. Bouncing from one undesirable situation to another is not the goal. While speed is important and highly valued, actual strategic thinking is more important. If you insist on moving quickly, and for some of you there is little choice, at least identify the very predictable problems that the quick moves will create. Develop plans quickly to minimize the negative impact. Agile was never intended to mean bounce from one bad decision to another. The value in agile capabilities within your company is its fast learning, fast change incorporating that learning, and then fast learning again. If you skip the learning, incorporate learning steps, you're not agile. You're just chaotic. Stop the pendulum from returning you to prior problems. Think. Analyze. Rely on robust processes you've put in place.

Could your manufacturing company utilize a retiring Brigadier General who has led small and large international groups in theaters of war and in standing up government infrastructure in countries in turmoil? The typical immediate response is "wow! what a background. But what could he do for us with no experience in manufacturing?" Hiring someone because they look different, or come from somewhere else is too often an effort to hit a target rather than hire the best. When I was in the corporate world a global corporation was looking for a female executive to lead the operations of a technical division. I was told by the executive recruiter I had a head start because I am female. I had no problem gaining an interview because I not only had a strong background but also am a woman. I would have had a problem with getting an offer because I am a woman. My confidence is sufficently high to know I was offered the role because I am competent. Competency and diversity are not mutually exclusive. I honor that company's leadership for working to become more diverse in the 1980s, before it was "a thing." A room filled with Ivy League grads will generate less creativity than a room filled with intelligent people with diverse educational and life backgrounds. When an organization repeatedly chooses to hire people with the same look, the same background, and the same thinking, the organization will fail. Maybe not today, but sooner than later. If we can't figure out how to leverage the experience and thinking of people unlike ourselves, we're not very smart. And that is true whether "we" are a group of black women, a group of middle-aged college-educated citizens, a group of McKinsey alum, or a group of new immigrants. How do you recognize impactful diversity?

We all know we have to be innovative. Many of us demonstrate that by introducing new products regularly. Do they all make sense? Should we simply add to the number of offerings without subtracting? The process of ensuring that the products and services offered by a manufacturer are optimal for the company and its customers is call product rationalization. Too many of us don't do that, don't build it in to our new product development/introduction process, and waste time trying to determine the profitability of each and every product. Some sales folk insist we never eliminate a product because someone might want it someday. Some insist that "line breadth" is fundamental to gaining business with large customers. And some focus only on the products that are easy to sell and that provide healthy commissions. None of that is inherently wrong or bad. Topics like market confusion, internal complexity, cannibalism, brand reinforcement, and offense vs defense products should all be part of your product rationalization process. The primary need is to have one. Just adding products is rarely the right strategy. Whacking the old ones is rarely the right strategy. But there must be a strategy governing what you develop and introduce, what you eliminate, how you present options to meet the needs of your customers, and how you leverage internal competencies to position your company for strong market position. And please don't let Standard Cost Accounting lead you to ill-informed decisions on what makes and loses money for your business.

Not all markets are good markets for you. Not all customers are good customers for you. And not all orders are good orders for you. How do you recognize the distinctions beforehand? And how do you fire a customer once you've already accepted them? A good customer for you is not the same as for others, and cannot be based solely on top line potential. Sadly, too many get sucked into that revenue potential and make commitments later regretted. Examine these six attributes before deciding a potential customer is one that enables the two of you to succeed together: 1) If you are mission driven, and enduring manufacturing businesses are, a company that does not have a viable externally focused mission will not be a good customer for you. 2) If their demonstrated, not written on the walls, core values are not consistent with yours, they will not be a good customer. When the going gets rough those distinctions will rise to the top. 3) Do their current "partners" tell you that the potential customer really knows and behaves in concert with the true meaning of partnership? Partners do not unilaterally change payment terms. Partners do not take your parts out for bid without you knowing about it. If you want to serve companies that respect you, look for true partners. 4) Do the needs of the company match the direction you want to go? If not, the relationship will be short and will add nothing to your business. 5) Are they committed to getting better in all ways? If not, they will stagnate, bringing you with them. While I have little respect for WalMart as a company, it has taken the lead in many important new technologies, bringing its major suppliers along. Is there a near term advantage to a potential customer, knowing you will want to leave them in a few years? 6) Is their risk tolerance aligned with yours? Larger companies can afford to swing and miss a few times. Smaller ones must be very selective on which pitches to swing for the fences. But mission, core values, partnership, near-term alignment can be insufficient if risk tolerance is very different. But now you have them, and realize they are not a good customer for you. How do you fire them? First, realize you must. They cannot be part of your healthy future. It is merely a question of how and when. Yes, there is a financial reality to this process, but there is also the very important opportunity cost aspect. What could you be doing that you're not because of that customer? Saying "no" is not easy for many of you, but it is a requirement to running a healthy and enduring business. Is it optimal to quote new parts for that existing bad customer? No. Is it optimal to give cost reductions you cannot afford to that customer? No. Is it optimal to obtain a certification that bad customer requires? No, unless they are in a market you want to pursue. Then, yes it is. A bad customer is part of your overall asset allocation. Consciously decide how much you want to invest in them, now and tomorrow. They are likely costing you more than you realize.

Most manufacturing businesses are much more complex than they need to be, simply from lack of focus on the value of keeping things simple. If we're not paying strict attention, we find ourselves with more customers, suppliers, sku's, and part numbers than we need or that is best for our business. Not all markets are good, not all customers are good, not all suppliers are good, not all products are good for your business. Conscious decisions must be made. The easiest way to implement that is through well thought out policies that are implemented effectively. Parts rationalization is one simplification framework that usually doesn't elicit emotional response to be overcome. There are two primary aspects to the process. (1) Define and enforce a policy of when and why new part numbers can be added, and (2) review and standardize existing bills of materials on the standards that are defined by the policy. Of course that 2nd step must be coordinated through your change management system. A quick example using fasteners as the part category: Do you really need all the fastener part numbers you have in your master list? Typically standards can be set on material, diameter, length, connecting mechanism, and perhaps another one or two characteristics. Those standards would work just fine for the vast majority, if not all, of your products. Use those standards in all new product development, and in every engineering change order to an existing sku. Simultaneously, have someone -- an intern can often do 90% of this project well -- review all "where used" items for each existing fastener part number to determine which ones should be changed to the standard. By stating a date-certain that the project should be fully implemented, and coordinating with all involved parties like supply chain and material handling, you will have simplified aspects of your business in short order. You will have simplified engineering design, materials management and handling, off site service, and spare parts inventory management in this one fairly straight-forward effort.

Every one of your employees must clearly see how his actions and decisions impact execution of the business strategy. This is accomplished through a line-of-sight deployment process. It is not enough to describe the strategy at an all-hands meeting, or even add to that the down-one-level strategy. Stopping the formal deployment process at that points leaves entirely too much to false assumptions and bad guesses. You are familiar with the 5-Why problem solving process in which we keep asking why until we identify the root cause of the problem we've defined. Strategy is similar. We have a strategy defined at the high level, but must roll it down level by level to understand what its implementation requires. You know you have accomplished that when every employee can reverse that thinking process by describing their priorities and actions "so that." An example: "I am reorganizing the warehouse and receiving area so that we can flawlessly add new materials and components to our storage so that we can begin producing samples of our innovative new products for market test so that we can expand sales of those new products to the most receptive markets so that we can grow our sales and profits so that we can deliver on our owners' mission of providing reliable employment as we serve the evolving needs of the automotive aftermarkets." By using a line-of-sight deployment process surprises are reduced and prioritization and decision making are improved.

No manufacturer can afford to ignore the concept of Digital Transformation. Yes, there continues some small need for manual lathes, but don't plan your future on that. In the past several editions of this podcast I discussed several business-side categories of digital transformation, from machine health to connected employees to using blockchain to create and maintain internal quality records. That information was intended to help you envision the future you are trying to create through digital. It was also intended to help you prioritize. Now it's time to act. No manufacturer has all the information and capabilities needed to design and implement a digital transformation -- not even the Siemen's of the world. They too reach out to external experts. It's possible you'll choose to start slowly with a small company helping you get your arms around machine sensors, data collection/quality/storage/security, and the information you can gain. But that company will not be the best one to lead you through your full transformation. Research systems integrators, talk with your peers, and visit several executives of manufacturers ahead of you on the journey. Attend trade shows and manufacturing conferences to gain a foundational understanding of the opportunities and challenges you will face. This electronic data world is rapidly evolving. Whomever is best today may well not be even among the good tomorrow. When choosing your partners, examine their history of staying in front of the pack, explore their investments and their financial commitments to the future of technologies, and reduce the chances of getting someone whom you outgrow in your first few years. This is an important choice, and not an easy one. It is no place to focus on lowest bid, but rather on most informed and most driven to stay informed.

It is always smart to start with a business case before deciding to move forward with a specific technology in your digital transformation. The same is true with blockchain. In prior podcasts I've described several categories of business benefit to consider in creating your digital transformation roadmap. We've considered machine health, connected employees, and more, without focusing on the technologies that make those things possible and effective. In blockchain, it is important to understand the high-level capabilities of the technology and then determine if that capability is of potential value to you right now. First and foremost, understand that blockchain is NOT cryptocurrency. It is the technology that underlies much of those, but it is not the same. Think of Excel as the technology that underlies the financial spreadsheets you use. They are not at all the same thing; your spreadsheet is of value to you and uses Excel as the enabling technology. Blockchain is extremely valuable in creating an agreed upon and verified history of transactions. One use case is known as "smart contracts" in which blockchain recognizes when conditions are met per a contract and can initiate the next step, for example payment approval. This is especially useful in financial transactions and those related to import/export trade. A second use case is that of traceability. Now American manufacturers must sign something that assures the minerals used are not conflict minerals. The reality is that very few actually know. We ask our supplier to assure us of that, and based on their word, we assure the next company in the process. Blockchain can enable traceability from the beginning to the end-point of interest. This is currently in use in much of the diamond industry, where guaranteeing that product is NOT blood diamonds is important to value. Walmart is beginning the process of requiring food suppliers to join their blockchain network to enable traceability of fresh foods from the store all the way back to the field. If your business is transaction light and traceabilty is unimportant, you can likely put blockchain on the back burner for now. But you do owe it to the future of your business to know what it is and what it is not as you draft your digital transformation roadmap.

We'd love to know of any problems with incoming supplies in time to either fix them, or make them irrelevant to our needs today. But most of us live in the world of surprises and reactions. Think of the airport control tower. They can't afford to have a plane show up with no notice, nor for one to decide to land the other direction. A storm miles away may impact both the inbound and outbound flight potential. Now apply that concept to your supply chain. With the right data at the right time your supply chain team could see exceptions before they become a problem. They can prioritize, make adjustments, and made decisions to minimize any negative impact. That takes data. Think through the kinds of data you would need, and how you would get it. We only want to know about exceptions, which means we need a standard -- or an expected time and location for everything. Then we need the current reality. Data analytics can identify normal acceptable variation and highlight to the supply chain control tower personnel exceptions that require attention. GPS information, updates from your 3PL, weather forecasts, data from your own operations -- those are all part of the equation. As you consider your approach to digital transformation for your manufacturing business, end-to-end supply chain visibility has a place. This term currently refers only to tier one and "should be happening right now" supply chain issues. That's an important start, but next we want will to proactively see supply chain problems and opportunities and more integral information from suppliers' suppliers to customers' customers. We'll address the potential for that in next week's podcast on traceability, smart contracts, and blockchain.

Prior podcasts have introduced the digital transformation business categories of "machine health" and "connected employees." In this episode we discuss "smart products." Some manufacturing products are easy to visualize as electronic sources of volumes of data; others, not so much. Yet a significant portion of the products developed, manufactured, sold and/or serviced by manufacturers have great stories to tell, if only we'll listen. The two primary reasons to consider smart products are: (1) to simplify or improve the user experience, and (2) to provide information for you -- the manufacturer -- to improve design by understanding use in the field with specifics. Kinetico® is a water treatment company that sells both commercial and residential units. Those units have consumables that the user must track and address. To make that much easier for the customer, Kinetico has embedded smart technologies in the units to highlight approaching maintenance needs. Printers have done something fairly similar, in indicating when they are getting low on ink. What would make usage of your products by your customers in their various environments, usage patterns, and other variables easier? Jet engines are made of complex metals (currently) produced through very advanced metallurgical techniques. They hardly seem a candidate for generating masses of electronic data. However, both Rolls-Royce and GE have added data collection, analysis, and prediction capabilities. They now receive a premium, through the "as-a-service" business model for significant improvements in fuel efficiencies and flight routes that save their customers literally millions of dollars. This real-time data capability not only facilitate those immediate operational gains, but also provide information to the design engineers to determine how to develop much improved jet engines. Without data, so many things we take for granted today would be more difficult. When considering your digital transformation, smart products is one arena you cannot afford to overlook. Where you prioritize it is one question, but to ignore the potential is short-sighted.

Connected employees is a phrase that can intimate workers and confuse leadership. When clarified, it becomes an integral part of your digital transformation. Connected employees simply means that as employees move around doing their jobs, they have the information they need where they are at that moment. It requires mobile devices because employees are mobile. An understanding of the types of mobile devices available and the types of information various employees need in what format will help you envision the physical aspects of this concept. Perhaps now you can see why some companies are prioritizing a private 5G network inside the operations. No one wants a data dump. Some need a single number, some a graph, some a data set, some a visual picture of what they cannot see without the device. No single device will meet all those needs well. Drive device selection by employee need and convenience, not by what the salesman promises. Headsets for AR, VR and MR have great potential to help employees, but so far their in-use success is somewhat limited. The reason? Size and weight mean they are uncomfortable to use consistently. Tablets and phones are familiar to most everyone, but how should they be carried and which is right for presenting which kinds of data? Think of the gains in productivity from merely eliminating the need for workers to find a supervisor to answer questions that could and should be answered with data out of your systems. Or from the supervisor being able to "see" the problem on his phone or tablet while in a different area. All of this technology, data storage and governance, analytics, and provisioning of information exists and is productive right now. Machine health and connected employees are two components to consider when thinking about your digital transformation roadmap. It's helpful to know where you want to be in one-year, two, or five. Not in specifics, but in the capabilities you want the organization to have that are weaknesses now. Giving employees what they need to do their jobs well seems a fundamental responsibility of leadership, and it is. It's not magic, but when you see the vast improvements you'll think it was.

In manufacturing, reliable healthy equipment is a fundamental requirement. Yet so many of us struggle with unplanned downtime due to equipment failures. Digital transformation often has as its first arena in manufacturing machine health. Initial efforts at machine health have revolved around preventive maintenance executed on the schedule recommended by the manufacturer of the equipment. Some of us are better at that than others. Another step is knowing if equipment is running at the speed it was designed for. Frequently we run it at a slower speed to optimize how it works for us. That's an indication of something wrong. But all of that is merely addressing the basics. The machine health part of a digital transformation -- that is using data and analytics to understand the "why" of our machine operations -- takes us to a much better place. Goals include zero unplanned downtime, cost-effective maintenance, and awareness of the operating environment that best supports the health of the equipment. Predictive maintenance is part of that, but not all of that. Knowing all critical influences on machine health allows your operations to lengthen the life of the equipment, produce higher quality output faster, and reduce costs. Do you wish you knew for certain how ambient temperature and humidity, fluid age and viscosity, vibration, changeovers, variations in power to the equipment and more impact the health of each piece of your equipment? With data and data analytics, you can do that. Every manufacturer has different types of equipment of different ages made by different manufacturers. Each of those pieces of equipment has a different history of use, maintenance, and handling. With data, you can understand all of it, regardless of those distinctions. Industry 4.0 and the digital component of it are instrumental in the future of every manufacturing company. Machine health is one place to start as you pursue this journey.

If you can't lead change, your company cannot succeed. The rate and types of change that success requires continue to expand. Digital Transformation is a buzzword, but more importantly it is a genuine requirement of any manufacturing business that will succeed over the next several years. Imagine the manufacturer that considered electricity an irrelevant newfangled technology. Imagine the manufacturer that considered computers an irrelevant newfangled technology. The same fate will befall those who consider digital capabilities and the power of data to be irrelevant to their businesses. Transformation means a fundamental change; it does not mean baby steps. Pursuing a digital transformation of your manufacturing business will fundamentally change how you operate, how work is done, the products you offer, and how you interact with customers and suppliers. It is important to begin by getting your arms around large categories of your business operations and how instantaneous access to the right information at the right time and place will be transformational. A few examples include (a) machine health (b) connected employees (c) smart products and (d) end-to-end supply chain. You already try to take care of your equipment, generally via gages and preventative maintenance. You already try to provide information to your employees, but too often involve delays and insufficient facts. You already try to develop good products, but overlook the power of knowing how those products are being used and how they are performing could have on product improvements and true innovation. You already try to stay on top of incoming deliveries and outgoing shipments, but continue to be surprised by failures of the supply chain system. Digital transformation can fundamentally change all of those aspects of your business, and more. If you can imagine it, likely digital can help you attain it with current and evolving technologies.