Good morning everyone. As I reflect on what is happening in your world and mine, observing how people are coping with the COVID-19 pandemic, I recalled how similar this current situation is to my professional career as a crisis leader. Our current situation is not anything our planet has ever seen before however it’s important to remember that, best practices are transferable from industry-to-industry and situation-to-situation.
The worst thing anyone can do at this point is panic and be paralyzed to move forward. Yes, we have a battle on our hands, however we will get to the other side and life will continue. I was taught a best practice for crisis management, both personally and professionally. It has worked for me, the unhealthy firms I was responsible to lead, and incidentally for my family in times of terrible problems. I have learned and polished this best practice for 40 years so I know that it has validity. That best practice is to build a routine. Our current routine has been disrupted. We are creatures of habit. Building a routine creates order in our lives and order reduces uncertainty. Reducing uncertainty, no matter how little, allows us to perform better, in all things, especially in dealing with new uncertainties. As a former Crisis CEO the first thing I did for my people was bring order to chaos by enforcing action and communication routines. We collectively developed and executed a schedule, converting this schedule every day or every week (depending upon the activity) into a routine. This simple practice, always worked. I recommend that you develop a new schedule for your personal and professional activities, converting this into a new routine. I would get this done today as time is the one resource, once spent, that you can never recover. Once you get into a routine, you will note that your performance will dramatically improve as well as your tolerance and innovation skills to tackle new problems. This is a terrible problem that we are all facing but it is also an opportunity for each of you to develop chaos-conquering skills. I leave you with a quote from a wiser person than myself as guidance; “You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before.” Rahm Emanuel Best, Steve The Canadian Manufacturing Identity Crisis - and the opportunities it offers for all of us2/27/2020
Manufacturing has been around for a long time. From the time early humans picked up a sharp rock or stick and grasped the concept of a tool, we have had to consider how to make things to survive and thrive.
Manufacturing is simply the process of converting something into something else of greater use/value. Although the methods and materials we use have, and will continue to evolve, the requirement to produce physical things will never go away and the need is ever increasing. But there seems to be endless confusion about what manufacturing is. So why then if manufacturing is a part of our survival, have we become content to be so vague in our understanding of it? On a global scale it does make sense to trade with other nations for different aspects of manufacturing, but this does not relieve us of our responsibility to maintain our manufacturing knowledge and innovation. To do so is to cut ourselves off from opportunity. Confusion caused by disconnected points of view There’s a lot of terminology out there: Industry 4.0, Advanced Manufacturing, Additive Manufacturing, Lean Manufacturing, IoT, Digital Transformation in Manufacturing, Technology Adoption for Manufacturing, etc. The confusion comes as each of these approaches to manufacturing splinter the focus into separate solutions bringing with it contradictions and generalizations. The resulting confusion translates into lost productivity and lost opportunity, for individual firms and for Canada. If we focus on individual tools as universally applicable, we gloss over the opportunity to understand the true operational challenges facing the majority of Canadian manufacturers, who happen to be manufacturing start-ups and small and medium enterprises, at a macro level. There is no substitute for going out and listening to folks at individual firms who can tell us those things which are not written down, unlocking the experience and tacit knowledge that lives in individuals, and individual firms, which can then develop into new knowledge for innovation collaboratively. This cannot be done in isolation, or through any kind of automated method. Manufacturing is more than factories and folks in coveralls There are many firms who produce physical products (in some cases the physical products are simply a device to deploy software as a core product) who vehemently reject any association with “manufacturing” in favour of being “tech” or “IoT” (Internet of Things, which from a purely manufacturing point of view is simply any manufactured product with connectivity). In doing so, they set down a path of reinventing the wheel with the belief that their firm or product is unique, and they disconnect themselves from over a century of knowledge advancement around how to produce things effectively, and competitively. All the while, time to market is extended, as is cost and risk. While not the sole cause, this is a major contributor to Canada’s decline in productivity on the global stage compared to other nations. It’s a little like watching someone starve while they sit in front of a feast. To be clear, this is not the fault of “tech” or “IoT”! My belief is that it’s the fault of all of us who call ourselves professionals in manufacturing. Manufacturing is our best kept secret Canada has a strong manufacturing sector and in fact, is exceptionally good at manufacturing and product development. It’s a massive part of our economy. However, misinformation runs rampant and we hear myths like “You can’t develop product in Canada”, “Canada can’t produce products economically” and “manufacturing is dead” which is frankly, garbage. As manufacturing splinters itself into the categories mentioned above, we miss the forest for the trees. Ultimately the decision of where to produce is a data-based equation specific to each product and there is no one-size fits all answer. But many products can be developed right here, quickly and economically, regardless of where they are ultimately produced, and this has been demonstrated time and again by many firms. For the most part however many of us in manufacturing are guilty of saying “we’re too busy getting the job done to talk about it”. We really need to shift that perspective. Collaboration is key Our friends in tech have an approach that we should definitely learn from. Many tech folks regularly share information, articles, celebrations, etc. through LinkedIn and other social media outlets. While it may seem time consuming, it does demonstrate a different approach – let’s share knowledge, let’s collaborate, and let’s solve common problems together so we can focus our individual innovation effort on the things that make us different and competitive. While many firms divorce themselves from being “manufacturers” and therefore from manufacturing knowledge, Canadian manufacturing itself hasn’t adopted the same external collaborative philosophy common to tech and common to manufacturing in other nations, and so we also sit and starve at a table full of food. I’m as guilty as anyone. But because of that, I know that for any firm which produces a physical product – any physical product - there is a definite path to break through the fog. Manufacturing is strategic, not transactional If your firm generates revenue from a physical product, then your manufacturing is the engine that enables your firm to deliver the value your customer will pay for. Often, it’s viewed as just the opposite, as an afterthought or as transactional activity. The reality is how well you manufacture will decide how well your firm will survive. Supply Chain is the connective tissue from your customer’s customer to your supplier’s supplier. But manufacturing is the one element of overall Supply Chain that must be supported by the whole organization, and in turn it supports the organization itself. Manufacturing by its nature can multiply value (or waste if managed poorly), so its worth placing it as front and centre if your business relies on physical product to make money. There is tremendous opportunity! Canada sits on the edge of massive opportunity! The connectedness of our modern world affords opportunities to re-imagine manufacturing. Specifically, Canada is very well positioned to be a global leader in the manufacture of low volume, high value/complexity products. Think MedTech, DeepTech, Machinery, Automation Equipment, and virtually any other product where the volume will not be that of consumer goods, but precision as well as reliability is critical. This is Canada’s future, and its ours to lose! From my point of view, here’s how we can collectively improve Canada’s productivity from the grass-roots on up, and get past manufacturing’s identity crisis: 1) Seek to understand your own firm and your own business case
Applying a system thinking approach to your firm’s challenges will separate symptoms from root cause problems if applied horizontally across all functions and not localized within one department. Understanding how to select the right data to base decisions on is key, since too much data (and over-complexity) can be as problematic as none at all. 2) Seek to understand manufacturing beyond your firm, for better context
A common truth around all of these manufacturing approaches is that they all have value, but none of them can solve all problems for all firms (nor should they). Its up to each firm to acquire knowledge specific to their manufacturing first in order to identify the right tools and then know how to apply them effectively. Application is key. 3) Finally, collaborate outside of your firm. Both your competitors and your colleagues in manufacturing will face common operational challenges. It is a waste of money and worse, a waste of time for firms to work separately to find solutions to common challenges when they could leverage knowledge across industries to solve them. Instead, grow your involvement and awareness of your own ecosystem, who the players are and ways to work together for common benefit which will increase knowledge development, and innovation. This will increase the time and resources you have to apply internally to those things that differentiate your firm from others – your competitive advantage. Canada’s manufacturing can have a bright future, and we have all we need today to get there if we collaborate under a system thinking mindset. Who’s in? My Dad taught me a lot of life lessons, but two of them really stick. The first is to be honest; the second lesson is to buy the best quality products that you can afford and take care of them - they will reward you with a long life of use.
What products do you use – whether it’s a tool, an appliance, an article of clothing, a musical instrument, camping gear, or anything else - that have had a long, useful, life and are a pleasure to use? Bring to mind the older things that you consider to be vintage. Recently I listened to a podcast featuring Satish Kumar, where he says: “whatever we have should be beautiful, useful and durable at the same time.” It’s advice that he got from his grandmother. He calls it the ‘BUD’ principle of elegant simplicity. Let’s break that down a little - and as we do, I encourage you to think about how this applies in your life and experience. Later in this article, we’ll look at why forward-looking companies can benefit from adopting these principles for the products they design and manufacture. Beautiful When something is beautiful, we will want to use it for a long time. What do we mean here by beautiful? I can hear the discomfort among our engineering readers about something so subjective, so let’s qualify it:
Useful Think of the presents that you may have received in the holiday season. What will you still want in 5 years? What will wind up in donation pile, trash, recycling, or garage sale? Just so that we don’t get too puritanical here, useful items include toys, musical instruments, and so on. The question is whether this is something that you will want to pick up and use over and over. When I recently downsized from a four bedroom home to an apartment, I needed to purge about half of my possessions. What do I miss? Very little – in fact there’s a sense of freedom and lightness of only having what I need. Durable Products that last many, many years, potentially even lifetimes. Durable products are repairable with simple replacement parts and able to retain their functionality for years to come. The Business Opportunity The Turning Tide We are witnessing rapid transformation in the world. The last 40 years or so have represented a time of conspicuous consumption for many and an emphasis on low cost products that were designed and manufactured for planned obsolescence. This philosophy and behaviour has contributed to a lot of the environmental problems (landfill, pollution, climate change) that we’re just now starting to deal with. Considering that most of us are now aware of the problem, there’s an increasing desire for products that truly provide benefit (that are a joy to use and contribute to a better world), that minimize pollution and energy use throughout the lifecycle, that are usable for a long time, and that can be transformed well after they are no longer usable. Paying for the True Cost of a Product Our economic system privatizes profits and socializes costs – environmental (pollution, use of land), and societal (pressure on wages, benefits, safety, local economic collapse through plant closings, etc.). Governments, communities, and families are often the ones paying the cost of poorly made, low cost products, but this is starting to change. Just recently, the Ontario government announced that it will start charging producers for waste diversion. When the costs are borne by the producer, different product design and manufacturing decisions are made. The successful organizations of the near future will be the ones who consider these costs now and shift their design and manufacturing decisions accordingly. Our North American Opportunity How will we, in North America, be successful in designing and manufacturing products right here? I believe there’s an emerging market for high quality, well designed and made products that are affordable for most – the market segment between the low cost/marginal quality and the expensive/ultra premium end of the market. Many of the best designers and makers will want to work on these products and many consumers will turn to these products as their true value becomes appreciated. What goes around, comes around. Maybe my Dad was on to something. Once the ink dries on the contractual signatures, it can feel like a weight has been lifted. Negotiations are over for another round, and both sides have an agreement they are satisfied with – so what now? In long-term partnership agreements, often spanning several years and hundreds of millions of dollars of business between partners, the management of the agreement and the relationship becomes critical. Successful agreements set clear expectations and behaviours for both parties - allowing all involved to focus on improving the overall system that produces and delivers materials, components, or services from supplier to customer. This approach results in better quality, lower prices, and a higher level of engagement between all involved.
Negotiation of supply agreements is a key function for any Sourcing Professional, and requires strategic planning, an extensive knowledge of a firm’s supply partners, and internal cross-functional alignment. Every stakeholder wants to be heard, and wants their say in contract content, planning - and needs to be kept updated through the negotiation process. As the lead negotiator, the Sourcing Professional must be detailed, meticulous, and determined, as well as an excellent communicator to see the supply agreement through to closure and execution. Taking a System Thinking Approach to Contract Management Considering the supply contract from a system thinking perspective, one needs to take a view of how each supplier fits into the overall value chain, and consider the significance that each partnership brings. Involving all stakeholders early in the contract structure and negotiation processes, keeping discussions focused on business and terms at hand, and searching for ‘win-win’ scenarios will ensure that agreements close positively for both parties. In turn, the execution portion of the contract will begin with both firms focused on joint success, collaboration, and continuous improvement in order to achieve the mutual goals set out for the contract term ahead. There are times however, where the path to ‘win-win’ is not always clear. There are situations where a smaller firm relies on a much larger firm for key components to their product. What do we do when a supplier does not need our business? Instances like this require a Sourcing Professional to take on a sales role – selling the organization, the product and the future to a larger supply partner. Additional efforts in the form of constant contact on the phone and in person – and transparency in plans and requirements - lead to credibility between the larger supplier and smaller customer. Putting in these efforts and taking a sales and promotional role can lead to a collaborative reciprocal relationship even with organizational size imbalance. Key Components for Building and Maintaining a Long-Term Supplier Partnership A few things to remember during contract structure and negotiation that will go a long way in maintaining and building a partnership with a supplier after it has been signed:
Ultimately, while negotiation of a mutually beneficial supply agreement is a critical part of the Sourcing Professional’s job – along with securing supply and pricing, governing behaviours, and setting expectations, it is the relationship with the supplier that is the foundation of successful growth between partners. A positive, transparent, reciprocal and cross-functional relationship will lend itself to profitable long-term partnerships. Efficient Product Development is Driven by a System Approach That Continually Considers Value12/17/2019
Nearly all product development is a multi-disciplinary effort, usually with tight constraints on time, cost and function. But most engineering groups tend to design in isolation, where even the different engineering disciplines don’t interact, let alone considering supply chain, manufacturing, service, test etc… The risk is a design that doesn’t meet the business goals and needs to be reworked or adversely affects the company’s performance. I’ve learned this hard way in the past, having to re-design mechanical systems, for example, when they wouldn’t work with what the electrical engineers designed.
There are two principles that will help develop better products, quicker – value analysis (a part of lean and value stream theory) and systems design. Every process is made up of a series of steps or tasks. These tasks may not be linear, there may be a complex set of interactions required, but they always share the same basic structure. Every task includes a set of inputs, has a set of required outputs, has stakeholders who use those outputs, and is done under a set of constraints. The outputs should be based entirely on the value they deliver. The end goal is always to produce a product that meets the company’s goals as outlined in their business case. If the output of any task doesn’t contribute to those business goals, it’s waste. If the output has to be reworked because it doesn’t work with some other part of the design, it’s also waste. The inputs are where many design processes slip. I think everyone will agree that every part in a design is somehow affected by the other parts. It could be as simple as a bracket holding a PCB or as complicated as a motion control system controlling the movement of mechanical components driven by remote user input. The key to effective design is to consider those interactions from the start of design. System thinking is a way of looking at the inter-relationships of parts once they have been combined into a system. A portion of a design may seem appropriate on its own, but when taken in context with the entire system may fail. For example:
System Design is the application of systems theory to product development, taking a multi-disciplinary approach to design and implementation. It’s not a new concept, but it’s one that will save a lot of design time and produce a better design. The key to planning and executing the design is to first to consider the value each task creates. The three primary aspects of value are:
If we understand what value each task is to deliver, we can better understand what needs to be designed, and more importantly what is not required. And that helps determine what inputs we need to carry out that design. Those inputs will typically be from multiple sources including the design specification, outputs from preceding tasks, input from concurrent tasks, and some additional design knowledge and information. If we continually look at how each task is effected by previous tasks and how it is effected by and affects concurrent tasks, we can complete each task in a way the develops the most value for the overall system. By considering the entire system when planning each design task, and the value that task is generating, we can be more effective, producing better designs with less waste. In this article we discuss sustainability, lay down a vision beyond sustainability, consider the role of design, and offer a few tips and questions that address the practical aspects of design for a healthier planet.
When engineers think of design and sustainability, what often comes to mind for us are straight technological fixes: energy efficiency in products and processes, reduction in toxic materials, recyclability. Although these are important, they only present a partial view of what’s necessary to solve the problems that we’ve created - to shift to a healthier physical and social environment. Questioning Sustainability Let’s first look at the concept of sustainability. What is it that we want to sustain? In the developed world, we’ve mastered taking care of our material survival needs – at least for those who can afford it. We’ve created a world where entertainment is literally at our fingertips, or at the command of our voice. We can travel at high speed and in comfort to almost anywhere. The list goes on. We’ve also created a world of (mostly exported) wars, depletion of land, species extinction, oceans choking in plastic, huge landfills, rapid climate change, social disconnection, and alarming rates of addiction, anxiety, and depression. In this context, what does sustainability mean? Do we want to keep this going for another 100 years? 500 years? We might ponder this thought: Maybe if we were to only to do half the harm, we’d be able to carry on more or less like we have been. Change our perspective. Change our world. The world and the products that we create are a reflection of what’s going on inside of us, of our society and of our corporate and work environment. As Indian teacher Sadhguru says: “How can we create a world of peace, when we have no peace in our own minds?” As designers, when we increase our own awareness, our compassion and self-compassion, our empathy for all living beings, our capacity to listen, our accountability, integrity and honesty – we begin to change our definitions of what’s important. When we combine these soft skills with our technical ability to create safe, functional, and cost-effective products, we create products that are more supportive of life and healing of the physical and social environment. This may all sound like wishful thinking, however I believe it’s the shift that’s necessary to begin turning things around. After all, isn’t doing the same thing over and over and expecting a different result the definition of insanity? Changing our approach only sounds so radical because the promotion of the current approach (faster, cheaper, more, …) is so entrenched in our systems of education, media, government, and corporate culture. When we begin seeing beyond what we’ve come to believe, the creative space opens for new possibilities. Where Do We Start? A good place to start is to consider the world that we’d love to inhabit and create, then refocus our thoughts and efforts toward that. For each of us, this will be different. And it will not take place overnight. What is your vision? For me, this world and my place in it includes:
Some Questions to Ask When Designing The Product Itself: What are we designing? How aligned is it with the vision that we hold for the world we want to live in? The Design Process: How are we designing? Is the work environment supportive or depleting? Are we rushing to get the product out to the market or taking the time required to produce something brilliant? Are we considering what our customers truly want? Production: What are the social and environmental impacts of production (from raw material extraction and processing to manufacturing processes and assembly)? Lifecycle: Is the product designed to be durable? Is it serviceable? What is the impact of the packaging? How much energy does it consume when it’s used? When its life is over, how will it be transformed (recycled, burned for fuel, re-purposed, composted, …)? Moving Forward We can design, as MIT professor Otto Scharmer writes in Theory U, what the emerging future is calling of us. Successful companies of the near future will be the ones who inspire. Who inspire the very best designers and makers to work with them? Who inspire customers who are thirsting for well designed, well made, and affordable products that truly enhance their lives? Who inspire their suppliers to co-create with them? Who are in right relationship with the planet and the beings that live on it? Let’s wake up to possibility. Realize that we’ve all had a hand creating the current reality. It’s time to create a new one. I’ve laid down a vision. I’d love to hear yours. To be successful and profitable (to meet the needs of the business) every product is a collaboration of multiple groups. As an engineer, in the past I’ve been as guilty as most at jumping into a new design assuming I understand all the requirements. After all, I’m smart, I can design it. But then later I’ve had to rework designs because I’ve missed a critical feature, misunderstood a requirement, picked a component that wasn’t supportable, etc.
I believe that one of the most important elements of a successful product is typically ignored or overlooked. Good design cannot happen if the designers don’t understand everything the product must deliver, how it must deliver it, how it affects other groups, the target cost, and timelines. But the design isn’t the only critical element in bringing a product to market. Parts must be sourced, purchased and delivered, other parts need to be fabricated, then assembled, tested, packaged, stored, delivered to the customer, and often serviced. Everyone involved, in all of those steps needs to understand what the intent is, what the limits are, and what to do if something doesn’t meet those intents. The design specification is the one document that should capture all of that information. If you Google product specification you will find lots of examples discussing a product design specification (PDS) or product requirements document (PRD) as it applies to a software product. These same documents are even more important for a multi-disciplinary product. There are more teams involved in the successful implementation; hence more need for clear and thorough sharing of all the requirements. I have always combined the PDS and PRD, but regardless if there’s one document or many, they should be referenced and organized in one place where all the required information can be clearly documented and accessed. The product spec starts with the business case. After all, we’re trying to make something someone wants to buy and we want to sell it at a profit so that the company can continue and grow. The business case should outline what functions the product must have, who it will be sold to, where it will be sold, in what volumes, and at what cost. Obviously, if one document is going to include everything required by all parties, it can’t be created and completed day one. It will continue to evolve as the details are developed. Industrial design will take marketing data and develop form and function, engineering will take the functional requirements and the industrial design and develop the detailed designs, supply chain will work with engineering to source materials and help plan production, manufacturing will take the designs and bills of material and plan assembly etc. A typical comment is that there’s not enough time to write a spec or that we already know what we want and there’s no need for a spec. At a recent manufacturing peer to peer group meeting we were discussing a design specification for a relatively simple automotive part. The spec had multiple revisions and had grown to approximately 60 pages. Someone in the group piped up and said every one of those revisions was a lesson learned. A thorough specification that is used, maintained and reviewed by all stakeholders will help plan more efficiently, avoid problems, achieve business objectives, and almost always reduce the overall time and cost of product development. In future blogs I will explore how to use the design spec to plan efficient and effective conceptual and detailed design, custom part fabrication, assembly, testing and quality control. An important hint – knowing how the spec will be used will make writing one much simpler and quicker. In this post, we’ll explore why well executed engineering drawings are still essential – in this era of 3D printing, 3D CAD, and the outsourcing of manufacturing.
As a college teacher and design advisor to start-ups, I’ve noticed that young mechanical designers have a great aptitude in 3D modeling, but often don’t direct much effort to the creation of detailed engineering drawings. I can understand the motivation for this. 3D modeling is fun – kind of like the electronic equivalent of working with modeling clay – and creating drawings just seems like a lot of tedious work. Even though the creation of a simple drawing layout from a 3D model is incredibly easy with modern design software, the harder work comes in when we apply dimensions, tolerances, and detailed notes. This is the type of notation that requires us to identify important functional relationships and limit the allowable dimensional variation that will ensure that functional requirements are met. Developing mastery in creating drawings takes time. Unfortunately, the shift in the typical environments for young designers often doesn’t support this development. When I began my career, most college and university engineering grads would begin work at medium or large size companies – where we took on junior design roles and learned how to create drawings from experienced designers who knew the products well. I call this the guild model of learning. Let’s contrast that with a common situation today - where recent grads are often the only mechanical designer in a start-up environment and are expected to create drawings for a wide variety of parts and assemblies. I can really empathize with them, as they’re in a situation where they have to either figure it out for themselves or contract out the work. So the question arises – Do we even need detailed drawings anymore? After all, they seem like a relic of when drafting boards ruled and 3D printers didn’t exist. Isn’t the 3D model good enough? Great points. To question 1: there is an alternative method called model based dimensioning (MBD), where all of the information normally contained on drawings is applied directly to the 3D model. I suspect that this will take over from drawings eventually, however it’s not yet widely used and the early implementations of it in software have been awkward to use. In this article, drawings and MBD are considered to be equivalent. To question 2: actually, we can get away with minimal or no drawings in the early proof-of-concept and subsequent industrial design phases. But once we get to the NPI phase, where we’re designing parts for testing, compliance certifications, and ultimately production, the information contained on drawings is essential for four key reasons: 1. Design – Documenting Requirements with Unambiguous Language Designers need to capture the higher level design intent for the product (e.g. ease of assembly, alignment, gap consistency, reliable sealing, etc.) and ensure that the manufactured component parts meet this intent. In order to do this, the critical characteristics and dimensional variation of these parts must be documented and clearly communicated to whomever is manufacturing and inspecting them. Engineering drawings accomplish this function, using common standards and languages developed by organizations such as ISO and ASME. In addition to clear communication, the creation of engineering drawings forces the designer to carefully consider how the component parts support the overall design intent. 2. Supply Chain – Quoting Drawings contain key information - such as tolerances, identification of critical dimensions, material specifications, finishes and coating – that do not typically exist on a 3D model. This information is critical for a supplier to quote accurately on a job. A supplier’s business success depends on meeting the specifications on the design documents at the lowest possible cost. If the specifications aren’t fully and clearly communicated, the resulting parts may not meet design intent. 3. Operations - Manufacturing and Inspection The manufacturer will select machinery, processes, tools, and fixturing to ensure that parts are produced at the lowest cost that consistently meet the dimensional tolerances and other characteristics specified on the drawing. Parts can then be inspected to unambiguous requirements on drawings, represented with standardized symbolic language, allowing for in-process control and reporting. This applies regardless of whether the parts are produced in-house, locally, or at an overseas contract manufacturer. 4. Legal – Contracts, Compliance and Protection The drawing represents what the manufacturer agrees to produce and is a contractual document, along with the purchase order and other documents. If the parts shipped don’t meet expectations, the first question should be: do they comply with the drawing specifications? In the unlikely event that the end product causes damages, and either civil or criminal charges are brought forward, the drawings will likely be used as evidence to assess whether or not proper care was taken in the design. The question then may be: do the drawings and other documentation ensure that the design complies with safety and regulatory requirements? We can see how clear and complete engineering drawings are essential for ensuring that product requirements are reflected in the design, that the manufactured parts meet those requirements, and that legal considerations are given due care. Doing the drawing work up front can save a lot of headaches down the road as well as expedite the time to market. At BKW we're very proud to have our Value Stream Mapping projects guided by Brian Watson. Brian is a supply chain system thinking expert, and he has spent his entire career helping firms across various sectors improve their performance. Brian spent 21 years in manufacturing, enjoying much success improving the performance of the firms he managed. For 18 years, Brian was a Professor of Supply Chain & Operations Management at Conestoga College. Since 2017, Brian has been the Director of the Magna Centre for Supply Chain Excellence at Conestoga.
Through his role with Conestoga College, Brian has been able to share his knowledge and increase awareness of the importance of system thinking in improving firm competitiveness in this dynamically complex global economy. Recently, he authored a whitepaper focused on Canada’s productivity and how system thinking enables businesses to strive for sustainable competitiveness. The following is an excerpt from the whitepaper, Addressing Canada’s Productivity Challenge: Sustainable Competitiveness Through Integrative Supply Chain System Thinking (May 2018). Canada’s economy lags behind many other nations in terms of productivity. It is projected that Canada’s productivity growth rate will be slower than many of its peers over the next thirty years. Addressing Canada’s productivity is a dynamically complex challenge, impacted by international, national and organizational factors. While governments hammer out trade agreements, tax and business policy regimes, there is much that individual organizations can and must do to address productivity improvement. The predominant argument put forward to address productivity improvement is that of investment in technology. While investment in technology is necessary, it is not sufficient in addressing Canada’s productivity challenge. Many SME’s do not have the resources or skills to invest in technology, while other firms invest in technology without truly understanding its impact, often resulting in unintended negative consequences. Organizations must first place their efforts and resources on improving system effectiveness in delivering ever increasing customer value. Only then should investment in technology occur. Effectiveness first, then selective investment in technology where appropriate, in a never-ending process of innovation, knowledge creation, continuous improvement and value creation. Doing so generates much needed financial and human capital and improves operational and financial performance, allowing the organization to leap ahead of the competition and establish sustainable competitiveness in the process. To achieve this, a transformation in thinking and behaviour is required. This paper will identify two key areas requiring the immediate attention of executives and senior management across all organizations. The first is the development of mission critical integrative supply chain system thinking competencies in their organizations. Integrative supply chain system thinking marries training in effective supply chain management with system thinking, then applies these in addressing the productivity challenge. In the process key competencies are developed, necessary for improving an organization’s effectiveness in delivering ever increasing customer value and improved productivity in today’s (and tomorrow’s) dynamically complex global economy. Of note, in 2016 the World Economic Forum (WEF) identified the top ten skills required by organizations needed to thrive in the fourth industrial revolution.* Those top ten skills include;
Integrative supply chain system thinking competencies, when developed as outlined in this paper, and in concert with effective leadership, embodies all of these skills. The second key area requiring immediate attention is that of organizational culture. An organization’s culture must be one that encourages collaboration, risk taking, is focused on customer value creation, adopts continuous improvement as foundational to its strategic approach, and regards all employees and key supply chain partners as critical to the creation of innovative new knowledge. Developing such a culture requires organizational leadership that values and adopts such principles and approaches in the day to day managing of the firm. Unfortunately, such leadership is at odds with traditional cost-focused management culture found in many organizations today yet is absolutely essential to achieving sustainable competitiveness in today’s (and tomorrow’s) dynamically complex global economy. World leading productivity, and with that true sustainable competitiveness in the global economy, comes through the effective application and leveraging of all of an organization’s resources, not just technology. This is true for organizations in all sectors of the economy. It takes skilled supply chain specialists trained in system thinking to effectively leverage all resources including technology; integrating, coordinating, and optimizing them to achieve world leading productivity and system performance. It also takes a leadership culture that fosters an environment in which knowledge creation, innovation, and continuous improvement toward true sustainable competitiveness can flourish. This paper reviews the work of a number of key thought leaders in defining integrative supply chain system thinking. Additionally, a case involving a manufacturing firm is outlined throughout the paper in an effort to better understand the importance of integrative supply chain system thinking to improving organizational effectiveness. Improving productivity in Canada is an urgent matter that must be addressed by governments, business, and education systems alike. Unless taken seriously and accompanied by specific action, Canada’s productivity, and with it our competitiveness and standard of living will continue to fall behind. This paper is a call to action to all organizational leaders to address the productivity challenge. It is also a review of what needs to be in place for improved productivity and sustainable competitiveness to be achieved. If you are an organizational leader charged with the responsibility to improve your organization’s/supply chain’s performance then I encourage you to continue reading. If you would like to read the full whitepaper, please click here. *The Future of Jobs, Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution Report, World Economic Forum, January 2016, as summarized in, Alex Gray, The 10 skills you need to thrive in the Fourth Industrial Revolution, January 19, 2016, https://www.weforum.org/agenda/2016/01/the-10-skills-you-need-to-thrive-in-the-fourth-industrial-revolution World Economic Forum, Retrieved February 26, 2018. Scale (or Scale-Up) and Growth are two terms commonly heard these days when talking about just about any kind of business. More and more these terms seem to be used interchangeably, but they are in fact two very different things.
Scale To “scale” fundamentally means to increase your firm’s overall revenue without adding significant increase in fixed and/or variable cost spending. Essentially this is the challenge every start-up will face, however Small and Medium Enterprises (SMEs) and even large multinational companies also have this challenge when attempting to respond to a changing environment. For a start-up, resources are constrained, however the business must find a way to advance especially if it has not reached break-even. For an SME or a very large corporation, the market may dictate the selling price for their product - therefore the only way to beat the competition is to find a way to provide more value than others at the same price. The only way to do that is to scale - to offer greater value without taking on greater cost to do so. Growth Growth is the opposite strategy to scale. Growth is the commitment of resources and money in order to make more money. We see this scenario all the time: a company has a great idea and receives an investment, which is intended to give them the tools they need to get to the next level. If it were this simple, why do so many companies continue to struggle and at a far greater cost post-investment? Creating Effectiveness Our experience has illustrated to us that many companies that believe they have a growth challenge actually have a scale challenge. You may be aware of Dr. Peter Drucker’s seminal research over 60 years ago that resulted in the popular expression: “before you can be efficient, first you have to be effective”. In a manufacturing business, this relates to the idea that there’s a hierarchy in the development of any product or service - where no product or service can be optimized until it is first capable of producing the requirements dictated by the business. If the product is poorly engineered and can’t be supported by supply chain or operations, no amount of optimization will improve it. We have seen countless efforts to optimize or continuously improve business processes that aren’t effective, and the result is wasted effort, cost, time (time being the most expensive, non-renewable resource), and often a lot of fire-fighting and churn in an attempt to delay the inevitable failure of that product. The only way to know if something is effective is to measure it against the business case, the primary objectives of the company. If the process or product isn’t delivering what is required by the business, the solution is often to take a scaling approach versus a growth perspective. Once you’ve managed to scale, strategic investment in resources and technology can expand the firm’s scaled operations and leverage the knowledge developed through the preceding scale process. That knowledge is a firm’s competitive advantage, particularly if it enhances the value that customers experience with that firm’s products and services. Competitive Advantage When a firm has been able to scale, they have developed the internal knowledge of their product and operations without adding significant capital expense or investment. Their cost to produce and deliver has remained more or less the same, but they are realizing greater value for each sold unit. Often however, scaling leads to lower costs with higher value, so the firm enhances its performance at both ends of the profit equation: price and cost. Beyond this however, this newly developed product and operational knowledge is difficult for an outside competitor to replicate. A firm that has scaled successfully has changed the behaviour of its employees and supply chain. This usually results in even further improvements in both effectiveness for customers and efficiency of production. At this point, carefully targeted growth strategies can leverage a firm’s effectiveness - while the unscaled firm lacks the internal knowledge and capabilities required to effectively utilize investment. Scaling is possible here, in Ontario The number of times we have heard people say that manufacturing companies can’t scale here in Ontario (or Canada) is staggering - yet it’s simply not true. Here in Waterloo Region, we are the 4th largest manufacturing sector in Canada, virtually any type of high-performance service you can imagine is within a 250km radius. Scaling efforts need to be guided by hands-on experience, for which there is no substitute or magic technological bullet. Scaling effectively means taking a whole-business (or “systems”) approach versus a “silo” approach (focusing only on individual business functions or symptoms as disconnected challenges) to unlock value. The silo approach is the most obstructive barrier to achieving successful scaling. However, once a firm has developed its own “system” knowledge around scale, the sky is the limit for what the firm, its employees and supply chain partners can achieve. |