Han-Tek, Inc.

Bringing Automation to Solar Manufacturing

2010-06-09T10:51:00.000-07:00

Robots can significantly reduce cost in the photovoltaic manufacturing process. Here's a guide to picking the right one.

www.industryweek.com/articles/bringing_automation_to_solar_manufacturing_21791.aspx?SectionID=30

By Rush LaSelle, Adept Technology, Inc.

The U.S. has set 2015 as a goal to reach grid parity, which means the point in which solar electricity is equal to grid electricity. Many other nations predict reaching it as soon as 2010. But no matter what your thoughts on regulatory involvement, it is clear there will be a resurgence in investment, development and innovation within the photovoltaic (PV) manufacturing community throughout the world -- and it will largely be driven by technology.

Finding the most effective tools and processes is paramount. While the significance of robot automation in the manufacturing of solar cells is obvious, determining which fits a specific process may not.

Robotic Automation's Impact

Robots in the photovoltaic manufacturing process are important due to their ability to significantly reduce costs while continuing to increase their attractiveness compared to manual labor. Richard Swanson, CTO of SunPower, a large-scale manufacturer of solar technology, described automation's impact through the prism of economies of PV manufacturing in terms of labor.

According to Swanson, to produce one gigawatt of solar power it requires 250 to 500 laborers to produce polysilicone, 250 to 500 laborers to process ingots, 3,000 to 6,000 people to manufacture the cells, between 1,500 and 3,000 for the panel lamination and associated applications and between 2,500 and 5,000 for the solar system integration. In total that's anywhere from 8,000 to 16,000 laborers required to produce 1GW of photovoltaic capacity.

Therefore, to produce 500GWs of solar power per year equates to roughly 4 million people who could be adding tremendously more value in other capacities. With more automation, inclusive of appropriately applied robotics, the solar industry can cut that labor to 1 million people realizing a 75% savings in direct labor costs alone. Given this magnitude it is critical robots receive ample consideration in line design.

Selection Considerations

A handful of considerations will provide good direction in selecting the correct robot. First and foremost, what is the payload requirement for the robot? Frequently people only consider the products that are being handled. However it is important to also consider the tooling solution or end of arm tool (EOAT).
Evaluating the motion requirements is also critical. Not only the simple motion of picking and placing, but also what interferences exist between the robot, its linkages as well as other items that may be in dynamic motion within the cell.

Consideration must also be given to how parts are produced and throughput requirements. Repeatability is also an important factor and it should be understood that robot manufacturers tend to speak in terms of repeatability, while engineers and designers tend to look at it from the standpoint of accuracy. A robot's repeatability outlines the machine's ability, once taught, to return to that taught position. Accuracy references the ability to input a given location digitally and have the robot move to that point in space "accurately." Accuracy, therefore, encompasses offsets and other digitally inputted motion parameters and often varies within a given mechanical unit's work envelope. Thus, a good understanding of a process's requirements in combination with the capabilities of a given robotic solution requires careful evaluation.

Major Robot Types

Robot kinematics can be divided into four major categories: Cartesian, SCARA (selective compliance assembly robot arm), articulated and delta/parallel.

Cartesian The Cartesian kinematic solution is highly configurable as the platform includes everything from a single degree of freedom or unidirectional travel, to numerous axes of motion. Cartesian solutions have numerous applications within the PV industry. They can be applied to both small and large workspaces. An example of a job using a small Cartesian robot might be dispensing sealing material on the flange of a junction box. The sorting and placement of solar cells in a large rectangular is also an optimal application for a Cartesian. Solar cell sorting into multiple stacks in a large work area and processes such as stringing up and lay up within a large cubic area where robots are required to reach with good repeatability are optimum applications for a Cartesian robot.

SCARA The selective compliance assembly robot arm (SCARA) robot typically provides higher speeds for picking, placing and handling processes when compared to Cartesian and articulated robotic solutions. They also deliver greater repeatability by offering positional capabilities that are superior in many cases than those of articulated arms. This class of robot is usually used for lighter payloads, such as 10,000 pieces or less, for applications such as assembly, packaging and material handling.

Articulated Articulated robots have a spherical work envelope. These arms offer the greatest level of flexibility due to their articulation and increased numbers of degrees of freedom (DOF). This is the largest segment of robots available on the market. Articulated robots are frequently applied to process-intensive applications where they can utilize their full articulation and dexterity for applications such as welding, painting, dispensing, loading, assembly and material handling.

Articulated robots are applied in many solar applications, such as handling heavy silicon ingots which are also in an area where the robots might require industrial protection, and handling wafer cassettes where the orientation of the carrier might differ from pick to place utilizing the full dexterity of the robot.

Delta/parallel Parallel robots provide a cylindrical work envelope and is most frequently applied to applications where the product remains in the same plane from pick to place. The design utilizes a parallelogram and produces three purely translational degrees of freedom driving the requirement to work within the same plane. Parallel robots offer high-speed transfer of solar cells through manufacturer lines and a multitude of processes. Three examples are diffusion of process equipment, wet benches and PECVD anti-reflective coating machines.

Flexibility with Vision Vision has become a highly adopted tool to improve the productivity of robot automation in all industries and all facets of placement. Vision systems offer tremendous flexibility for applications that don't require fixtures or trays for part location.

Different part geometries only require vision re-training or the selection of a recipe instead of manual changes in fixtures and tooling, which increases the overall lifetime profit of the equipment by virtue of its optimization and improved throughput. Most robot manufacturers offer packages with multiple cameras and tracking solutions for integration into a single cell, which offers tremendous power and flexibility for solar manufacturing.

The common goal for solar manufacturers is to drive down the cost per watt. History has shown that automation has played a significant role in reducing manufacturing costs in many industries. When the costs associated with higher quality and yields are considered, the benefits of automation offer even more value.

As the solar sector scales for increased demand, many manufacturers in solar are looking outside their industry for the best practices in high-volume manufacturing. Automation and robotics is one answer to achieve that cost reduction.

Manufacturers Can Be Both Earth-Friendly and Wallet-Friendly

2010-06-04T08:19:00.000-07:00

Achieving ROI from waste reduction efforts is still a major issue for corporate sustainability efforts.

By David Blanchard

May 21, 2010

Sustainability isn't always about being "earth-friendly," says Bruce Tompkins, executive director of the Supply Chain Consortium. "Many times green initiatives also need to be wallet-friendly." And the good news, he notes, is that quite a few manufacturers have hit on effective and yet inexpensive ways to keep waste out of their landfills. Even so, achieving return on investment from waste reduction efforts is still a key challenge for those companies attempting to make their processes more sustainable. Based on a recent study by the consortium, more than half the companies surveyed are finding that ROI constraints are their main stumbling block on the road to sustainability. A lack of reporting standards is also a major issue, being cited by nearly half of the respondents. The survey also identifies the most frequently uses waste recycling techniques being used in the workplace:

84% place clearly marked recycling collection bins in easily accessible areas;
68% provide different types of containers for various types of waste to avoid mixing incompatible materials;
58% ensure that every employee has a recycling bin at their desk;
51% develop a company policy to recycle every possible material; and
51% provide reusable mugs, glassware, plate, and utensils for employee use in the cafeteria or break rooms.

Consider This -- Avoiding Obsolete Inventory

2010-05-27T06:25:00.000-07:00

Possession is 9/10ths of the problem.

By Rick Pay, President, The R. Pay Company LLC

May 20, 2010

http://www.industryweek.com/articles/consider_this_--_avoiding_obsolete_inventory_21862.aspx?Page=2&SectionID=12

Obsolete inventory is one of the largest components of inventory cost and often is larger and more costly than executives are willing to admit. Many suggest optimistically (and often sheepishly) that there is no such thing as obsolete inventory because it will sell … someday. I have developed a new three-letter acronym for this to go along with JIT, RAW, WIP and FGI. It is "GSM" for "Glacially Slow Moving"! Studies related to inventory cost and inventory reduction prove that obsolete inventory does in fact exist, along with the warehouses, containers and trailers to hold it. Warehouse personnel will express how frustrated they are because the inventory takes up prime bin locations and gets counted, recounted and moved many times during its life. Most companies are busy searching for ways to return, sell, give or throw away obsolete inventory, but the important question isn’t how to get rid of it, but how to avoid it in the first place.

Why does obsolete inventory build up? The root cause is uncertainty in both supply and demand. Reduce the uncertainty and you diminish your exposure to obsolescence. Three tools can accomplish this: 1) sales and operations planning; 2) auto-replenishment systems; and 3) "ramp-up/ramp-down" discipline.

Sales and Operations Planning

If you are experiencing growth in obsolete inventory, missed forecasts, reduced earnings and increased backlogs, consider taking major action through sales and operations planning (S&OP). S&OP strategies closely integrate the supply and demand planning processes that allow the business to provide the right products/services at the right time in the right quantity at the lowest possible cost. A tight connection between operations capabilities and sales demand planning enhances profitability, performance, customer satisfaction and return on investment, all while lessening exposure to potential obsolete inventory. Recent studies by the Aberdeen Group show that S&OP can boost profitability, delivery and cash flow, regardless of company size, by as much as 40%.

One of the key traps associated with demand planning is the optimistic view that new products or promotions will generate high sales. Many a company executive has been stranded with major amounts of excess inventory after ordering surplus materials/parts in anticipation of demand. Inflexible operations and supply chains require a gamble of sorts to ensure that the demand can be met. For example, many companies have ordered container loads of parts from China only to see the anticipated demand fail to materialize, leaving them holding mountains of inventory. Some companies make it worse by renting warehouse facilities to store it all, increasing costs in an already bad situation. Flexible operations, supplier partnerships and agile supply chains help prevent this catastrophe.

Auto-replenishment Systems

Auto-replenishment systems, which help reduce supply uncertainty, are another valuable means of preventing obsolete inventory. As the name suggests, they automatically replenish inventory without using systems such as MRP. The two most widely used are vendor-managed inventory (VMI) and kanban. Recently I helped a client almost double its inventory turns (from six to 11) in about six months using these methods. During the same period, the client trimmed its average order lead-time from more than 90 days to about 30 days, and the numbers are still improving.

The VMI approach asks suppliers to come on site to determine needed inventory, order it, receive it and often even put it away in point-of-use locations. While such systems must be managed correctly, VMI has the power to reduce not only stock-outs and excess inventory but also handling and transaction costs. Kanban, a Japanese technique that uses a card or other visual trigger to replenish inventory, is usually implemented as a two-bin system. When one bin is empty, the in-house or out-of-house supplier receives a signal to replenish in a fixed quantity. Both approaches can improve overall inventory turns and accuracy, while reducing stock-outs.

VMI is not without traps. If the programs are not carefully designed and monitored, suppliers will over-fill the bins, potentially resulting in excess stock. Many a salesperson, needing to make month-end or quarter-end numbers, has aggressively replenished customer stock. While VMI can be a strong tool for inventory management, bin sizes and vendor activity must be monitored to ensure that the system is preventing, not encouraging, obsolete inventory.

Ramp-up/Ramp-down

The last technique is what I call "ramp-up/ramp-down." This is the process of introducing new products and parts into the inventory system and eliminating old ones, and it prevents overstock in anticipation of a spike in sales. During the ramp-up phase, buyers should carefully monitor results to determine if sales are meeting the targets and communicate closely with suppliers to update plans frequently and set appropriate restocking levels. Even before the sales process starts, the materials group can collaborate with design engineering to suggest common parts that will help reduce the quantity of part numbers and the potential for excess stock.

Ramp-down is the process of systematically reducing the quantity of products and parts that are going to be superseded. Companies are often hesitant to discontinue old products, thinking that there may still be customers who will need it, or in the excitement of rolling out a new product, they fail to plan the slowdown of the old one. By making last-buy offers to customers, salespeople could actually boost sales levels in the short run. Buyers should adjust their restocking plans with suppliers to flush the entire supply chain. Regardless of how a company implements its ramp-down, someone specific (usually in the materials group or purchasing) must take charge of the process and remain actively engaged with sales and new product development.

Finally, what gets measured gets managed. Hold people accountable by establishing key performance measures for obsolete inventory, set a level of acceptable obsolescence and measure write-offs against it, and monitor slow-moving inventory through turn and earn reports to help ensure levels don’t creep up unintentionally. Use the "ABC" classification to rename obsolete or slow-moving items as "D" stock to help it stand out in reports. Then clean out the old stock.

Do you have obsolete inventory? Are you willing to own up to it? If you’re ready to reduce your GSM quotient, take a close look at what S&OP, auto-replenishment systems and ramp-up/ramp-down can offer. These three approaches, properly implemented, can help you avoid obsolete inventory and add to your bottom line.

Volt: GM's Four-Letter Word for Hope

2010-05-19T08:23:00.000-07:00

GM is investing heavily in research, testing and manufacturing facilities to pursue its electrification strategy.

www.industryweek.com/articles/volt_gms_four-letter_word_for_hope_21612.aspx?SectionID=7

By Steve Minter

April 21, 2010

"GM is moving from a company that, for 100 years, has been based on mechanically driven automobiles, to one that will eventually be focused on electrically driven vehicles," GM Vice-Chairman Bob Lutz told reporters at the Los Angeles Auto Show last December. "This is a big deal." GM's well-publicized first major step in this transformation is the Chevy Volt, scheduled to hit showrooms in November. GM describes the Volt as an extended-range electric vehicle. For up to 40 miles, the Volt can operate off its 16 kWh lithium ion battery pack. When the battery is discharged, the Volt's gasoline-powered engine kicks in to generate electricity to power the car. With this set-up, the Volt can travel more than 300 miles before re-charging or refueling is needed. Lutz says that "eliminates the ‘range anxiety' of electric-only vehicles -- the fear of being stranded by a depleted battery." GM says this technology combination means the Volt can achieve city fuel-economy equivalent to at least 230 miles per gallon. Based on a cost of electricity of 11 cents per kWh, GM explains, a Volt would cost $2.75 for electricity to travel 100 miles, or less than 3 cents per mile. GM is investing heavily in research, testing and manufacturing facilities to pursue its electrification strategy. The company is spending $336 million in its Detroit-Hamtramck assembly plant to produce the Volt. Other Michigan investments include $43 million for its Brownstown Battery Pack Assembly Plant, where the more than 200 battery cells used in each Volt are processed and installed into modules by flexible automated equipment and then delivered to the battery pack main line, as well as tooling and various components from five other plants. The lithium ion cells are manufactured by LG Chem. The current battery pack weighs nearly 400 pounds and is expensive. Some estimates put it at more than $5,000. Tony Posawatz, vehicle line director for global electric vehicles at GM, expects to see "dramatic improvements" in the battery technology and cost factor as GM and others ramp up both research and production volumes. "We are already working on a gen-two vehicle and battery program," says Posawatz. "We think we can take half the cost out of the battery."

Posawatz credits Lutz as a "driving force" to have GM take "the leap across the chasm to have electric motors drive the car." And with the potential for 200 million additional vehicles on the road by 2020 as consumers in developing countries such as China, India, Brazil and Russia buy more vehicles, says Posawatz, it's a "good business strategy" for GM to offer a variety of vehicles not dependent on petroleum.

While Posawatz credits start-up electric car manufacturers for their innovations, he says they want GM to succeed with the Volt and other electric-car initiatives because only the large-car manufacturers can drive the volumes necessary to attract more suppliers and reduce component costs. "Even the Volt had difficulty getting suppliers. When I went to get charger suppliers, basically the only guys out there were golf cart charger suppliers. They couldn't even approach our specs," he recalls. Now on the brink of producing the Volt, Posawatz, who was tapped as "employee No. 1" in the Volt program in March 2006, says its development "has indicated to us that we can be technology leaders again." Moreover, he says the Volt serves to "shine a light" on other high-quality GM products and help consumers "revisit the relationship they have had with GM." If it does do that, the Volt will have given battered GM just the shot in the arm it needs to put itself back on a profitable path.

Simplify Before You Automate

2010-05-12T07:13:00.000-07:00

Apr 1, 2010 12:00 PM, By William (Bill) Eureka

Simpler processes are easier and less expensive to automate than complex ones.

Automation can be key to business efficiency, but only if done right. Smart orgaizations know if they first simplify a process before they automate it, this will ultimately lead to reaping the greatest amount of rewards from the automation process.

Certainly, automation can reduce cost, create more throughput and, in many cases, improve quality. Theoretically, any process can be automated. Some are more difficult than others. One key to improving the success of automation is to simplify your process before attempting to automate it. Benefits of simplifying include:

� Ease of automation;
� Reduced cost of automation;
� Easier transition from current process;
� Higher return on investment;
� Locked-in improvements.

It is just plain easier to automate a simple process than a complex process, and the greater the complexity, the greater the difficulty and cost. Complex processes generally require more complex automation, which is more difficult to design, build, debug and install than their simpler counterparts. This difficulty consumes capital investment, lowering your payback.

Finally, once a process is automated, it is usually difficult to change. This provides the benefit of process standardization, but makes process improvement difficult. Generally, improvements are best made before automating. Failure to do so may cut you off from ever getting those improvements implemented.

Types of Processes
Not all processes are equally suitable for automation. We can group most processes into three broad categories: physical, transactional and hidden mental processes. There may be other ways to categories processes, but this will suffice for our discussion.

Physical processes are those that accomplish physical work, such as machining, assembly, transporting and shipping. Transactional processes accomplish non-physical work, such as order processing, scheduling, inventory management (excluding the physical part) and payroll processing. Hidden mental processes accomplish non-physical work by thinking, such as assessment, diagnosis, design, quoting and other processes that are generally thought to require judgment.

Hidden mental processes are usually the most difficult to automate, simply because they are not well understood. They are what goes on in the head of an expert�a doctor diagnosing a medical condition, a mechanic analyzing a malfunctioning machine, a TSA agent reviewing images of luggage to find security threats. These are all processes, but not well understood, even by the experts themselves. These may well be processes worth automating, but until their steps can be identified, they simply are not suited for automation.

Physical and transactional processes are often excellent candidates for automation, though the approaches are quite different. Physical processes are automated through machinery, which must be engineered, fabricated and installed. Transactional processes are typically automated through computers and software. Even so, both types of processes share the common characteristic of being composed of a sequence of work steps, each of which accomplishes a function. The clear identification of those steps must be done before the process can be automated.

Such a well defined process may be then automated, but that can result in excessive complexity and cost, often providing lower performance than needed. No process can be automated without first defining its steps, but the second step should always be simplification.

Simplifying the Process
At the most basic level, simplification is merely a review of the process, removing steps that are not necessary. This can appear almost silly, since why should there be unnecessary steps in any process? Every process, even the best, contains both value-added and non-value-added steps. The value-added steps are those that directly contribute to accomplishing the purpose of the overall process. Non-value-added steps do not. Theoretically, there shouldn't be any, but it always seems to happen.

So, how much non-value-added is okay? Strictly speaking, none of it is okay, but high-efficiency companies typically will have 70% or more nonvalue- added activity, as measured by time spent in the process. If we think of an assembly process, the value-added steps would be those which actually join parts together. Nearly all other steps, such as transferring parts into position, pre-positioning parts, starting fasteners and transferring the assembly out, are non-value-added.

Many of the non-value-added steps may be necessary, but only because we can conceive of no way to accomplish overall process objectives without them. If we could, it would be a simpler process. In a physical process, there are things that go wrong and often a need to detect and act upon such conditions. Both the detection and the correction are non-value-added because they would be unnecessary if the error could be avoided from the start.

If a product design calls for 18 screws to secure an access cover, of course we need to move 18 screws into position and drive them home, perhaps repositioning the assembly between driving screws. But if the product could be redesigned so that the access cover slid into a channel in the rest of the product, requiring only two screws, that would be a much simpler design to assemble. Simplifying the product that is assembled by a physical process will not only save cost but also improve the profitability of the product itself.

It is not the intent of this article to show how this simplification is done, only that it should be done. The method for simplifying a product was developed in 1947 by Larry Miles of General Electric, known as Value Analysis and Value Engineering (VAVE) and added to by Boothroyd and Dewhurst in the 1960s in their Design for Manufacturing and Assembly (DFMA). These techniques are basic engineering approaches that are all too often overlooked at great cost.

Another technique for process simplification is to eliminate opportunities for errors by mistake-proofing (pokayoke). Suppose a part that is inserted upside down will assemble but cause the finished product to be defective. We might build sensors into the process to detect such a defect, alarming or causing the defective product to be ejected from the process. All of the steps that would be taken to correct the problem would be non-valueadded. It may be more cost effective to repair a minor error than to scrap the assembly, but none of those steps would be needed if the error had not happened. Mistake-proofing prevents the error from ever occurring, so the correction, and even the detection, can be eliminated from the process itself. Shigeo Shingo has developed a host of methodologies for this and has been published extensively.

Eliminating Waste
Transactional processes nearly always contain much waste, but unlike physical processes, the waste is hidden. Defects in a physical process are often very obvious, whereas defects in a transactional process may simply cause work to be corrected somewhere downstream. Transactional processes, by their very nature, are invisible. If you watch workers in a physical process, you will see parts added and adjustments made, and will often be able to see the product emerging. Workers in a transactional process may be equally busy, but all you will see is their dealing with paperwork, typing at a computer or talking on the telephone. The process by which they do their work is not evident and neither is most of the waste.

To simplify a transactional process, we first have to make the process visible. This is typically done by process mapping, also known as flowcharting. By collaborating with those who actually do the work, we document the sequence of steps by which the work is done. Usually, the outcome of process mapping shows the process to be more complex than anyone had imagined. The fact is, in transactional pr ocesses, simplicity happens as the result of simplification efforts, while complexity happens all by itself. Over time, transactional processes change and steps get added, but there is usually no explicit effort to eliminate steps that are no longer needed. As a result, work that is no longer needed may continue for decades.

For instance, a shipping process in a Michigan furniture manufacturer had more than 200 steps. Leadership was amazed that something as simple as putting product in a truck could be so complex. Of all of these steps, very few involved touching product, but rather processing information (packing lists, bills of lading, customs documents, etc.).

A transactional process may be simplified by carefully reviewing each step and determining the value-added steps. In most transactional processes, there are typically less than 10% value-added steps. All other steps are candidates for elimination. One of the major opportunities can be found in error-correction loops. Just as in physical processes, things go wrong in transactional processes. When they do, there is an inspection that finds them and a set of corrective steps. These loops cause processes to become larger and larger over time.

In the shipping process above there might be a point at which it is discovered that a valid �ship to� address is not known, prompting a flurry of activity to determine the address. Rigorous examination of the process might reveal that the missing address was caused by an oversight in the order-entry process, which takes place in an entirely different part of the organization. The appropriate action would fix the order-entry process in a manner that guarantees that the �ship to� address is always correct and complete. With this done, the shipping process would never have to deal with the error, and the process would be correspondingly simpler. Most transactional processes use computers and software for at least a portion of the process. Software provides a good way to mistake-proof the process.

Anyone who has bought things online has experienced this. Most well designed merchant Web sites will take you through a series of steps and simply not permit you to proceed if there is missing or invalid information. Ensuring that e-mail addresses fit the usual format, credit card numbers are valid and ship to addresses are entered (if different from the billing address) are examples. Nearly everyone has been or will be touched by automation of some sort. If you are party to a process that is being automated, be sure to ask the question: What simplifications have we made in the existing process? Hopefully, it will be the beginning of a discussion that will result in substantial improvement and lower cost. Sometimes, you'll find that after simplifying a process, there just isn't enough left to make it worth automating. That's a bad deal for those you would hire to automate, but a very good deal for you and your company.

You've Done Six Sigma -- Now What?

2010-05-06T10:38:00.000-07:00

Does the scrutiny of your processes stop at your customers' front door?

By Jeff Thull, President and CEO of Prime Resource Group, Inc.

May 6, 2010

http://www.industryweek.com/articles/youve_done_six_sigma_--_now_what_21760.aspx?SectionID=12

One of the greatest strengths of the Six Sigma process is the intense scrutiny and subsequent improvements that can be made on critical processes. A potential but significant weakness in its execution is that most Six Sigma projects are inward focused and stop at the customer's front door. The typical approach asks questions such as "how can we make our processes more efficient, how can we improve the quality of our products and services, and how can we better serve our customers?" All of these questions revolve around internal processes with the goal of creating more value for our customers and delivering it at a lower cost. Certainly this is a valuable and rewarding approach, but if you agree that value only exists when it is created and measured as a net economic impact to your customer's business - then the "now what" of Six Sigma is going further to apply the principles to the processes of your customers and determine how value is created within their businesses.

An outward focus on the customer looks at how value is created within their business and what processes a solution can affect. It also determines what new solutions could be provided and how to measure the economic impact of those solutions when they are implemented. However, a critical issue facing many businesses today is that they have made serious investments in creating and delivering high-value solutions, yet their sales organization is not able to capitalize sufficiently on that investment by connecting that value to their customer's business drivers and the processes their value impacts. Therefore, their customers are not recognizing that value, cannot quantify it, and the net result is that sellers are pressured to discount and face a downward spiral in profitability, likely combined with the increasing costs of delivering that value.

It is a dangerous spiral that one company, Ossur, a manufacturer of orthopaedic devices, found itself in.

Lisa Tweardy, Ossur's Vice President, Orthopaedics, noted that the Six Sigma approach had correctly identified that their customer acquisition process was not bringing in the projected number of new customers, and the incremental volume of business that was anticipated as a result of their acquisition of six companies was also less than expected. Six Sigma helped immensely with the first step of getting all the companies functioning as one operating unit. What Six Sigma wasn't providing was the new processes and skills required for their customer facing organization. They found themselves continuing to sell as six independent legacy companies with six unique sales organizations, each focused on their own products and frequently competing for the same customers. A key question on Lisa's mind was, "How do we know a process, even when improved, is going to accomplish our objectives?" She noted that the shortcoming of Six Sigma is not the Six Sigma process itself, but "applying it to outdated processes." To create a new customer acquisition process, Ossur turned to Prime Resource Group who helped them apply the rigors of Six Sigma analysis to study how economic value is created within their customers' businesses. They then created a new customer acquisition and retention process based on Prime's Diagnostic Business Development process. The following recaps the additional questions that needed to be asked and the actions taken:

How is economic value created within our customers' businesses? Ossur identified three major customer processes that they could impact with their solutions -- quality of care, inventory management, and billing and reimbursement profitability.
How does our solution impact our customers' value creation processes and can we enhance that impact? Ossur's treatment guidelines improved patient outcomes through educating the clinician on applying specific braces at different treatment phases of the continuum of care. This created various types of value -- for the patient (shortened recovery time and improved outcomes), for the payor (back to work sooner), for the clinician and the practice (improved clinical outcomes, increased accuracy of billings and reimbursements, increased patient satisfaction and referrals, and increased Durable Medical Equipment (DME) profitability).

With value clarity received from the answers to the first two questions, the following questions were then considered and addressed:

What is the profile of our ideal customer? In other words, what are the visible characteristics of a sports medicine physician practice in which, when implemented, Ossur's solutions would be able to create the most value?
Based on this profile, what would be the likely economic impact of applying Ossur's solution to a specific customer's practice? This is referred to as building the value hypothesis.
What is the most effective customer acquisition process that will connect and quantify the value impact of their clinical education programs, inventory management software, and DME Management programs, to the value creation requirements of their customers?

By turning the focus of their analysis outward, on their customers' business processes, they uncovered that one of the major flaws of their legacy customer acquisition processes was that they were tracking the activity of the sales organization, not the activity or progress toward creating value for their customers. This led to a shift in focus and produced a dramatic increase in results. In the first 90 days of piloting the new process, Ossur had acquired more new customers than they had in the previous 18 months and with only 5% of the sales organization involved in the pilot program.

According to Robert Shoemake, Ossur's Sports Medicine Sales Director, "One of the more interesting aspects of the entire project is that to improve our sales process, we stopped thinking like sales people and started thinking like the clinical advisors we really are. We developed a profile of the characteristics of our best customers and recognized what constitutes value according to their business metrics. We then developed a 'Diagnostic Selling' process that included what questions to ask of each individual in our customer's organization according to their individual job responsibilities.

The outcome was a value simulation to quantify what the value impact of our solution would be when applied to their specific practice. In short, we were able to develop a process to help our customer understand how their practice was at risk and the costs associated with that risk. We could then connect the value of our solution to a reduction in that risk and an improvement in their business performance metrics. Six Sigma provided us the understanding of our customers' business processes. The Diagnostic Selling process then allowed us to apply that knowledge in a credible manner -- the net result, significant value created and captured for us and our customers."

As Lisa explained, "We repositioned ourselves from one of many vendors of orthopedic devices to trusted advisors and a source of clinical and business advantage to our customers."

Consider This -- Taking Lean Beyond the Shop Floor

2010-04-30T05:47:00.000-07:00

Industry Week: March 17, 2010

Fokker Aerotron has seen a variety of benefits from applying lean, but it's where it was applied that may surprise manufacturers focused on their production floor.

http://bit.ly/c1TtNZ

Frans van de Pol is not easily impressed. In fact, you might say that the president of Fokker Aerotron, a LaGrange, Ga., company specializing in maintenance, repair and overhaul of aerospace parts and part of the Fokker Aerospace Group, has been around the block when it comes to the MRO industry -- a block that includes management assignments in the area of aircraft manufacturing, engineering, aircraft conversions and MRO. Still, despite 23 years on the job, he admits to being awed by the results of a process improvement initiative that began shortly before he joined Fokker Aerotron at the end of 2008.

"When I arrived, our on-time delivery performance was unacceptable," says van de Pol. "Today, we've cut our turnaround time by half, and our on-time delivery is up to more than 57%. In fact, I fully expect it to be at world-class performance by the end of the year."

Needless to say, these drastic improvements in turnaround time and on-time delivery translate to a nearly priceless impact on the company's bottom line. It's an impact directly attributable to the application of lean process improvement techniques, which comes as no big surprise. No, the surprise is that the lean process improvements were focused not on the shop floor, but rather on the company's administrative processes.

A New Paradigm for Lean Application

I do not have enough words to describe how positive lean is and how huge the benefits are," says Fokker Aerotron Director of Purchasing Stacey Russell-Karr. "At the beginning, even I was skeptical, but now it's a permanent part of everything I do, including my personal life."

Under Russell-Karr's direction and with guidance from the University of Tennessee's Center for Executive Education, Fokker Aerotron has applied lean to six targeted administrative areas and now possesses documented proof that improvements in administrative processes have a direct impact on bottom-line performance.

For example, after two years of applying lean to administrative processes, Fokker Aerotron's gross profit margins are up by 5%, late delivery penalties have dropped by 93%, warranty repairs have been reduced 50%, work-in-process (WIP) is down 72% and inventory has been pared 39%. Moreover, the company now has excess capacity in facilities and staff, which enables future growth and expansion without additional capital outlay.

"When we started our lean adventure in 2008, we had a lot of processes that existed simply because we had always done them that way," describes Russell-Karr. "When we sought to improve our on-time delivery, we typically looked to the manufacturing end -- how could we push our technicians to turn the wrenches faster? It had never occurred to us that we could improve the entire operation by improving things in the office. Now, we've proven it several times over."

Long-awaited Proof

From the outset, the roots of lean have been grounded in manufacturing processes -- from as far back as Henry Ford's production of the Model T to Taiichi Ohno's modern-day Toyota Production System.

Given its origins, it is no wonder that the preponderance of lean application (and documented success) has been focused on the shop floor. Nevertheless, in the early 2000s, lean made its way to a few non-manufacturing venues such as call centers, software development, and, to a certain extent, the service sector. Still, the storehouse of success stories beyond the manufacturing arena is woefully lacking. Concrete, replicable implementation approaches for non-manufacturing scenarios are few and far between, and skepticism abounds as to whether manufacturing-based lean tools and techniques can be translated and sustained in a service or administrative setting.

Yet, the impetus for successful translation is enormous. The administrative expenses of running a business are a large part of the cost of an organization. In fact, average overhead expenses of manufacturing organizations have risen from 10% to more than 50% since the early days of manufacturing. Yet, those same administrative processes are often a bottleneck -- a huge source of inefficiency and waste, not to mention a hindrance to the revenue-producing components of the business.

Those overhead activities are supposed to serve as levers in the organization, enabling the production side of the business to more easily lift the heavy weight. Unfortunately, in many organizations, the servant becomes master, and administrative processes bog everything down. However, if those administrative processes are made better, all other operations also will improve.

Same Tools, New Venue

To be sure, Fokker Aerotron is no stranger to process improvement techniques. With its sights set on being an industry leader, the company embraces a variety of improvement programs such as lean, Six Sigma and 5S as a part of its "World-Class Performance" initiative. However, these efforts historically have focused directly on the shop floor.

Fokker Aerotron's adventure in applying lean to business processes began when the author was invited to consult with the company about improving invoicing and inspection processes. Shortly thereafter, Russell-Karr attended the Lean Applied to Business Processes course at the University of Tennessee.

"The Lean Applied to Business Processes course emphasizes practical application, so the entire week I was experimenting with applying lean techniques to our purchasing activities. The more I learned, the more applications I could envision," says Russell-Karr.

Back at Fokker Aerotron, Russell-Karr assembled a team that included her purchasing staff and upper management; she launched the first "event" in August 2008. Described broadly, the process comprised three phases:

Identifying key administrative wastes and the constraints limiting performance;
Analyzing potential root causes; and
Applying the proper continuous-improvement countermeasures.

"Our first meeting was rather quiet," recalls Russell-Karr, but van de Pol encouraged her to forge ahead. "Sometimes employees are very skeptical about these projects because they think that they have to work harder, but ultimately it is about working smarter, sometimes even eliminating unnecessary tasks," van de Pol explains.

Russell-Karr says "buy-in" by the staff came rather quickly. "As we worked through the process, our meetings got very animated and productive. Now, my group is so good that they often work through the process and use the tools on their own, which frees me to manage additional lean events."

Inarguable Results

Buffy Smith, senior buyer, shares the impact lean has made on her professional life. "I used to spend a good part of my day literally walking invoices around in circles, not being as productive as I could have been, because we had so much wasted motion in our processes," says the purchasing supervisor. She cites the path of an invoice as an example: 3.1 days of processing; 80 steps in the invoicing process, including 30 handoffs among employees and 12 trips to the printer; 1,080 feet of travel per invoice, with 17,540 feet (that's 3.3 miles!) of average transport by purchasing agents on any given day.

That was then -- before the company applied lean improvement techniques to its administrative processes. This is now: one day to process an invoice, requiring half the steps and one-third the number of handoffs. Moreover, Fokker Aerotron discovered that 30% of the total invoicing paperwork volume for customer parts was not needed at all.

The new flow of work has eliminated altogether the paper copies of purchase orders, likewise removing the need for a four-drawer filing cabinet and an entire warehouse of paper files. Says Smith: "We've now eliminated wasted motion; I have time to focus on things that really add value to this company, such as pre-planning and negotiation."

Another lean event honed in on "the cage" (the company's spare parts inventory) and the process of ordering not-in-stock (NIS) parts. Through the efforts of the lean team, the number of NIS orders was pared by 34%, the turnaround time on ordered parts fell by more than 50% and the stock-out rate improved from 30% to less than 3%. Moreover, the team eliminated more than 100 shelves of no-longer-needed parts and reduced its inventory of spare parts by 39%. This, in turn, freed up 2,375 square feet of floor space, so an expensive warehouse addition once thought to be a necessity is no longer needed.

Wouter van Dis, director of operations, cites an additional impact, albeit indirect, of Lean Applied to Business Processes that perhaps is its most significant contribution to Fokker Aerotron. "What we were really able to do on the work floor because of the administrative improvements was to put in lean cells, where our technicians have every tool and component at their disposal to fix the exact component they are working on at the time. If we had not ‘leaned out' our purchasing processes, lean cells would have failed. Instead, because our purchasing processes are so efficient, we're using lean cells successfully, and the impact on turnaround time, on-time delivery and customer satisfaction is enormous."

Scott Whittaker, Fokker Aerotron director of business development, says customers have noticed that something wonderful is going on at the company. "Our quality has improved, our service has improved, and our attitude has improved -- what's not to love about that?" Continues Whittaker: "Without a doubt, Lean Applied to Business Processes has made my job immensely easier because I have a quality product to sell and a quality company standing behind it."

Five Ways to Stretch Equipment Budgets in Tough Times

2010-04-23T13:16:00.000-07:00

By taking a more active role in maintaining and maximizing capital equipment, companies can extend the lifetime of the hardware by years.

www.industryweek.com/articles/five_ways_to_stretch_equipment_budgets_in_tough_times_20181.aspx?SectionID=31

Oct. 21, 2009

At a time when manufacturers are facing thinner and thinner margins, there's less room to invest in new capital equipment. This doesn't necessarily have to hinder companies, says Eddie Silverberg, CEO of Flexible Assembly Systems, a supplier of torque tools and equipment.

By taking a more active role in maintaining and maximizing capital equipment, companies can extend the lifetime of the hardware by years.

Here are five ways Silverberg says manufacturers can succeed in this, even on modest budgets:

Get manufacturer advice.
A high-end torque screwdriver or electric screwdriver can have a lifespan of less than six months if not used properly, he says. Doing background research, such as learning the best way to use the equipment, can make a dramatic difference.
Calibrate and maintain equipment on site, at regular intervals.
Equipment failure costs dollars in lost productivity and customer dissatisfaction, especially when part of an automated assembly system. Schedule to check and calibrate equipment and tools at regular intervals, and not when problems arise. Invest in an in-house calibration tool like a torque tester. Over time, it will save money, says Silverberg, and it often improves product quality as well.
Contract an outside agency to calibrate and maintain your capital equipment.
There are many firms that specialize in maintaining and calibrating equipment. Build relationships with the ones you can trust, and it will pay off. "The best capital equipment companies stay for the life of the tool," says Silverberg.
For the simple repairs, buy the spare part, and fix it yourself.
When purchasing capital equipment, find a company that sells the equipment, knows how it's put together and sells the spare parts. "A few minutes of homework can be the difference between a $3 clutch spring and the purchase of a brand new tool," says Silverberg.
Seek out product replacement with firms focused on ongoing repair.
Equipment and tools eventually need to be replaced, and dollars eventually need to be spent. Seek out firms with a long-term maintenance policy, as opposed to a focus on new product purchase.

Positioning Your Company to Thrive in the Months Ahead

2010-04-16T06:33:00.000-07:00

One company at a time, we can create jobs and reinvigorate our industry's competitiveness.

http://www.industryweek.com/articles/positioning_your_company_to_thrive_in_the_months_ahead_21586.aspx?SectionID=12

By Walter D. Gruenes, National Managing Partner, Grant Thornton LLP

April 15, 2010

It hasn't been an easy year for the U.S. manufacturing sector. Most manufacturers have felt the sting of the volatile credit markets, rampant job losses, flagging product demand and the quiver of uncertainties about the future -- made worse by our protracted recession. Creating new jobs and restoring strength to our industry have never been more crucial. As a new member of the National Association of Manufacturers board of directors, I am more committed than ever to making this happen.

But when --and how -- will we see the light at the end of the tunnel? A recent Grant Thornton survey of nearly 500 U.S manufacturing CFOs and senior controllers suggests that it may still be a number of months off. According to our survey, nearly half (48%) do not expect the recession to end until 2011, while nearly another one-quarter (24%) expect it to be later than 2011.

Moreover, only 29% of survey respondents' companies plan to increase hiring in the next six months, while 22% plan to decrease hiring. Hiring is even weaker amongst Fortune 500 firms (firms with revenues of $5 billion and higher); 31% plan to decrease hiring over the next six months, while only 23% plan to increase.

Regardless of when the recovery happens, those companies that are well-positioned for it will be able to capitalize on the opportunities. So, what should you do now to get ready for the eventual improvement?

Examine Your Suppliers and Key Customers

You want to be sure that you have strong and stable relationships with your suppliers, and that you clearly understand the financial condition of your suppliers and customers. Nothing can torpedo an uptick in business faster than the inability to source materials from key vendors or the inability of a key customer to pay their invoices.

Forecast Effectively

You also want to optimize the flow of product throughout the supply chain. This requires sharing production and demand estimates and schedules with your customers and suppliers. This will result in lower costs to you and higher margins on your sales, even if volumes don't grow as quickly as planned.

Implement Lean Manufacturing Techniques

Over the past two years, almost everyone has slashed costs to the bone. But have you really improved operations and become more efficient? Have you achieved a lean manufacturing environment? My experience is that many companies have not adopted basic lean techniques and tools such as benchmarking their operations, waste elimination activity, kaizen events and value-stream mapping. These lean techniques improve quality, eliminate waste and lower costs.You want to have your plant running as efficiently and effectively as possible to profit from the economic recovery in 2011 and beyond.

Now is the time to take action to make sure your company is positioned to thrive in the months and years ahead. One company at a time, we can create jobs and reinvigorate our industry's competitiveness.

Rockwell Goes Green

2010-04-06T13:18:00.000-07:00

http://forums.industryweek.com/showthread.php?t=14841

With $4.3 billion in annual sales and a workforce of 19,000, Rockwell Automation is doing their part for the environment. To them sustainable manufacturing is smart business.

"We believe if manufacturers are going to thrive in the post-recession global economy and help drive a global economic rebound, they need to adopt smart, safe, sustainable manufacturing technologies and practices. Smart, safe, and sustainable manufacturing enables manufacturers to increase productivity, meet business objectives and improve their ability to compete through better plant-wide use of energy and other natural resources, increased plant safety, and enhanced product safety and quality. A smart, information-enabled factory becomes a more energy efficient and safer factory."
From Smart, Safe and Sustainable Manufacturing, Corporate Responsibility Report of 2009

During 2009 at their 55 manufacturing and core locations they achieved the following:

Used 15% less electricity
Used 4% less natural gas
Increased 31% more liquid fuels
Decreased direct and indirect CO2 emissions by 12%
Reduced solid waste generation by nearly 30% and recycled or reclaimed 80% of that solid waste

Even their annual Automation Fair went green last year:

Used EPA SmartWay-certified freight transportation companies that used clean fuel-efficient trucks
Attendees received biodegradable literature bags with marketing materials produced by
FSC-certified printers who used recycled papers and soy-based inks.
Lighting and electronic devices were used at reduced energy levels and low energy lighting was used in many product displays.
Water was available from coolers instead of water bottles and they used biodegradable plates and cutlery.

To learn about other ways the company went green see their Sustainability Report

__________________
Adrienne Selko
Online Editor

Hope for Manufacturing

2010-03-29T08:03:00.000-07:00

http://www.nytimes.com/2010/03/16/business/economy/16econ.html

Production Increases Again, Pointing to Improved Demand

By JAVIER C. HERNANDEZ

Published: March 15, 2010

Industrial production picked up slightly in February, though a bout of winter weather hampered growth in manufacturing.

Production rose 0.1 percent over all in February, the Federal Reserve said Monday, with mining gaining 2 percent and utilities increasing 0.5 percent over the previous month.

Manufacturing posted a decline of 0.2 percent for the month, but economists said that was largely because of a series of snowstorms that temporarily closed factories along the East Coast and reduced the length of the workweek.

In addition, car manufacturing fell 4.4 percent, which economists attributed to worries about the safety of Toyota vehicles. Toyota halted production at several factories for a week in February as it developed a fix for sticky accelerator pedals in several models.

Economists said Monday’s report indicated that a recovery for the manufacturing sector was intact, even though output slowed in February. Over all, demand appears to be gaining strength, led by a 1 percent increase in electronics and computer production last month. When car production was excluded, manufacturing output rose 0.1 percent.

“There’s a pretty solid uptrend in place,” said Dana Johnson, chief economist for Comerica in Dallas. “Manufacturing is doing noticeably better than other parts of the economy.”

With the prospects for a recovery looking better, businesses are beginning to tentatively rebuild inventories. That has helped drive factory orders and made manufacturing one of the few bright spots of the economy. The sector continues to outpace the growth of the overall economy.

Factories are also benefiting from a resurgence in orders from overseas. Many businesses have seen exports grow significantly over the last six months, helped in part by a weak dollar and a surge in demand as foreign economies begin to stir.

Industrial production was up 1.7 percent in February compared with a year earlier, and it rose 0.9 percent in January. February’s gains marked the eighth month of upward momentum.

A separate report by the Fed on Monday provided more evidence that the recovery for manufacturing was robust. New York-area manufacturers recorded a surge in orders and shipments in March, according to the Fed’s Empire State Manufacturing Survey. Employment in the sector reached the highest level since 2007, and inventories grew to the largest levels since before the start of the financial crisis. The overall index of manufacturing activity fell, but not as much as expected.

Production is expected to continue to make gains this year. Economists forecast a large gain in industrial output in March as businesses make up for lost time caused by February’s weather.

John Ryding, chief economist for RDQ Economics, predicted that industrial production would grow 7 percent this year as the labor market improved and businesses in the United States and abroad began spending more on capital goods.

“The financial system has stabilized, and trade flows are reconnecting,” Mr. Ryding said. “The recovery continues to be led by a recovery in manufacturing.”

But economists note that a return to normal production levels is still a way off. Capacity utilization, which measures how much of the nation’s production capability is in use, increased slightly to 72.7 percent in February, far below the historical average of 80.6.

More Companies Select Lean Over Six Sigma

2010-03-17T06:24:00.000-07:00

Fewer corporations seek employees with Six Sigma experience, but demand for lean talent increases.

By . IW Staff

Feb. 18, 2010

http://bit.ly/agdDMU

Lean now dominates Six Sigma as the preferred continuous-improvement methodology among corporations, according to a study by The Avery Point Group, an executive search and recruiting firm for lean and Six Sigma talent.

The study of 3,500 recent online job postings shows demand for lean talent has surpassed Six Sigma by nearly 35%, up from an 11% margin in last year's study.

This is a dramatic shift from The Avery Point Group's 2005 inaugural lean and Six Sigma talent demand study that showed Six Sigma talent demand exceeding lean by more than 50%.

The study also shows only 41% of companies seeking lean talent expect candidates to possess Six Sigma knowledge as well, a requirement that has continued to decline in The Avery Point Group's more recent talent demand studies.

On the other hand, for those companies seeking Six Sigma talent, almost 55% are now requiring candidates to possess lean knowledge as well, a requirement that has steadily grown in its previous talent demand studies.

"For companies seeking lean practitioners, these results may be signaling a possible trend toward a decoupling of lean and Six Sigma, or at the very least a de-emphasis on Six Sigma as a core job requirement for lean talent," says Tim Noble, managing principal of The Avery Point Group. "It may also indicate that companies are instead opting to consolidate their limited resources around lean as a hedge against the steep challenges of today's economic climate, which they feel may be better served by Lean's more immediate and practical focus on waste, flow and flexibility."

In addition, this year's study focused on how requirements for certifications played into job specifications for lean and Six Sigma talent. This year's study found that companies that sought Six Sigma talent were almost 50% more likely to require some form of certification versus those companies seeking lean talent.

Where is it going?: Manufacturing in the US

2010-03-02T13:11:00.000-08:00

http://www.industryweek.com/articles/consistent_characteristics_of_competitive_manufacturers_21188.aspx?Page=1

CEOs around the world say that the U.S. is no longer the most competitive location for manufacturing, says Deloitte.

By Craig Giffi, Vice Chairman and National Industry Leader for Consumer & Industrial Products, Deloitte LLP

Feb. 26, 2010

Earlier this week, President Obama sat down with more than 150 CEOs at the Business Roundtable. The topic: Competitiveness. The president's comments: We need to nurture the industries of the future.

I think most of us would agree with this sentiment. So the real question is: What exactly do competitive industries look like -- and what specifically do we need to nurture?

At Deloitte, we are looking at this very question. Working with the Council on Competitiveness, we are concluding a multi-year survey on global competitiveness in manufacturing to learn how CEOs and other senior leaders view manufacturing industry competitiveness around the world.

While we won't have the final survey results until the spring, and more CEOs are responding each day, our work has already revealed findings that should cause us all to pause, take stock, and formulate a new path forward.

Though the U.S. remains the world leader in "share-of-manufacturing-value added," CEOs around the world are telling us that the U.S. is no longer the most competitive location for manufacturing. While it won't surprise any of us if China is at the top of the list when all the results are in, it should concern us that the U.S. looks to be losing ground and becoming less competitive over the next five years, with countries like Brazil and Korea leapfrogging us (the U.S. is already behind China and India in the eyes of the CEOs we've heard from.)

Interestingly, another recent survey we conducted, in conjunction with the Manufacturing Institute, polled a broad cross-section of average Americans, capturing their perspectives on the importance of manufacturing to the U.S. economy. The survey revealed that Americans believe a strong manufacturing industry is critical to our economy, and the most important industry to our future prosperity. The survey also revealed that the public sees manufacturing as the most attractive industry for future job creation.

While this type of research will continue throughout the year, including a number of face-to-face discussions with senior manufacturing executives around the world, I can already outline several characteristics that I believe will be inherent to the leading manufacturing organizations of the future. Chief among these are:

Global Orientation: Successful, sustainable manufacturers will be global, even if they never manufacture products outside their home nation. They will open their business processes to benefit from collaboration with partners around the world. They will pursue their markets and their customers in every corner of the world.
Innovators and Champions of "the New": Innovation of products, processes, services, and sales will be the most important competitive differentiator of leading manufacturers around the world. The development of new products and services for new markets, as well as new products for existing customers, will be a recurring theme for best-in-class performers.
Intersection Conductors: Innovation will occur at the intersection of ideas (intellectual capital), investment (financial capital), talent (human capital) and infrastructure (physical capital) -- and winners will outpace their rivals developing and deploying their capital through superior leadership, collaboration and technology diffusion, as well as product and service commercialization capabilities.
Developers of Best Customer & Supplier "Assets": Leading manufacturers will not only have best-in-class suppliers but also best-in-class customers. They will derive competitive advantage from the creation of assets in the form of networks of suppliers and customers that play a significant role in innovating new products, processes and services, and commercializing them.
Leaders in Supply Chain Effectiveness (Not Just Cost Effectiveness): Effective global supply chains will become increasingly important, while the focus on lowering labor costs will wane. As a result, the definition of productivity for winners will be inclusive of all facets of their manufacturing enterprise and interaction with their business environment.
Sustainability & Carbon Challenge Pioneers: The energy and carbon challenge will be transformational for manufacturing competitiveness and the stimulus necessary to create a manufacturing renaissance in America, especially once the recession wanes and energy demand returns to normal. In addition, the carbon footprints of manufacturing operations and manufactured products will be increasingly important differentiators of pioneering winners.
Masters of Risk & Resiliency: The most successful manufacturers will be both agile in confronting risks and resilient in adapting to disruptive change - in effect using it to their advantage.
Skillful Private Sector-Public Sector Partners: Successful manufacturing enterprises will strategically partner with the public sector around infrastructure development, talent development, and research capabilities. Success for the U.S. will require coordinated State-Federal competitiveness strategies in collaboration with the private sector.
Drivers of Dominant Regional Clusters: Regional clusters will become increasingly important and dominate success in manufacturing as both the public and private sector learn the power of focus, collaboration, and strategic choice. Leading manufacturers will collaborate with competitors, the public sector, suppliers and customers to develop such clusters.
Creators of Value Added Jobs: Nations and manufacturing enterprises will be significantly differentiated by their focus on value added job creation as opposed to job retention. Positive manufacturing job creation will be most consistently correlated to innovation in the base of manufacturing capabilities and the creation of new enterprises.
Winners of the Talent & Infrastructure Wars: The ultimate battleground commonly shared by both nations and manufacturing organizations will be for talent and the development and deployment of world class infrastructure. On these two issues -- talent and infrastructure -- the success of nations and manufacturing organizations are intimately tied.

What we are seeing here, especially given the increased intensity of competitiveness in the wake of the Great Recession, is that there are common factors shared among leading, successful manufacturing companies -- and, as a result, there are implications for nation-states themselves. Which brings us back to the questions at hand: How will we know which industries to nurture for the future? And how can the U.S. remain among the most competitive locations for manufacturing, and the prosperity that arises from a strong industrial base?

While the answers to these questions are still far from definitive, I'd say we already have some pretty good clues.

Good News for NY Manufacturing

2010-02-17T07:59:00.000-08:00

A recent article from The Atlantic indicated that manufacturing activity in New York is growing rapidly and that employment within the industry is improving as well. This is very good news, especially since manufacturing in the state was declining for awhile. It will be a definite economic boost for everyone in New York.

http://business.theatlantic.com/2010/02/ny_manufacturing_activity_grows_rapidly.php

Feb 16 2010, 4:45 pm by Daniel Indiviglio

NY Manufacturing Activity Grows Rapidly

The New York Federal Reserve reports that manufacturing in New York is growing very quickly. That's great news. This indicates that companies are either ramping up production or planning to do so soon. Some employment growth in manufacturing should follow.

Here's the news blurb, via BusinessWeek/Bloomberg:

The Federal Reserve Bank of New York's general economic index rose to 24.9 this month, higher than anticipated, from 15.9 in January. Readings above zero in the so-called Empire State Index signal growth in the area covering New York and parts of New Jersey and Connecticut.

That's the fastest pace of growth in four months. This is in response to anticipated demand, as well as stronger exports and better consumer spending. And here's some more very promising data:

The New York Fed's gauge of employment increased to 5.6 in February from 4 last month. Measures of the six-month outlook for new orders and shipments increased. The gauge of orders rose to 55.6, the highest since February 2006, from 52. A measure of sales also increased to 55.6, the highest since January 2006.

The inventory index rose to zero from minus 17.3, showing companies have stopped drawing down stockpiles. February marked the first month since August 2008 that companies weren't depleting inventories.

That last paragraph above is particularly noteworthy. It appears to indicate that manufacturing firms no longer have excess inventories. That means any further demand can only be satisfied through more production. And to make that happen, they'll need to ramp up hiring.

This is just a regional report, but it's hard to imagine that the New York area's manufacturing experience would be vastly different from what firms are seeing in the rest of the U.S. Even if the New York area does, for some reason, lead the rest of the nation in a manufacturing rebound's timing, then this news is still good: it indicates that manufacturing growth -- and eventually hiring -- in other regions should soon follow.

How To be Smart in Manufacturing

2010-02-10T08:37:00.000-08:00

Because the manufacturing industry in the U.S. has taken a little bit of a slump, manufacturers need to find smarter ways of getting the job done. An article by Dave Miller in Industry Week shows us six ways manufacturers can be smarter and more efficient.

http://bit.ly/bW21xV

Manufacturing Intelligence
Intelligence must become a top priority in manufacturing -- it has to be planned, implemented, managed and invested in. It usually requires a completely new view and perspective on what is traditionally looked at as strictly a mechanical or procedural challenge. It will include advanced data collection from sensors and actuators; immediate knowledge of inventory, assets, production condition; and increased process, productivity and cost granularity.
Predictive Analytics in Manufacturing
Manufacturers have to take their manufacturing intelligence and use it in ways that will predict the future so that decisions and actions are taken before problems emerge, before risk events happen and before opportunities are squandered. This includes embedded analytics; enabling predictive technologies; and rapid response capabilities.
Production Quality Management
This is how manufacturers achieve nearly zero waste, zero incidents and zero emissions. The new improvements in quality will stem from information visibility, connectivity, and analytics.
Integrated Scheduling and Operations Execution
New techniques are being developed to completely change how manufacturing scheduling can make plants and factories more flexible, produce more, and support more product designs. Again, this is driven by sophisticated uses of information and includes: dynamic execution planning and scheduling; sense and respond capabilities; and advanced modeling.
Manufacturing Visibility and Visualization
Information is useless unless it helps you understand and act. Imagine being able to have a holistic, dynamic view of your operations in real-time, being able to visualize people, systems, assets, and inventories as they make their way through a complex supply chain. New instrumentation, networks, and control rooms will enable manufacturers to see multiple factories in a single view, utilize advanced manufacturing dashboards; and optimize their capacity across the entire enterprise.
Manufacturing Network Monitoring
The ability to see and act on your entire network enables you to predict problems, quickly deploy corrective actions (such as repairs) and keep the entire network humming. This leads to improved operational decisions; enhanced remote visibility; and lowest cost of production possible.

Each of these opportunities requires a new view of information as a vital asset. It requires a different view of the manufacturing operation, and in most cases, a wholly new competency. If any of these ideas frighten or excite you, it's because they are frightening and exciting. The only way to get into them is to take the plunge, get in deep, and embrace them whole-heartedly.

That's the only way we're going to make manufacturing smarter, and making it smarter is the only way to win.

The Ethics of Multitasking

2010-02-03T13:11:00.000-08:00

This author has a lot of interesting things to say about how we are all multitasking too much. Multitasking is important, but in some instances it is a great distraction that can cause harm to others. We all need to be more vigilent and pay attention to what we are doing. Read what he has to say and comment. Thoughts?

The Ethics of Multitasking

Stop the multitasking madness: Put down the iPod and your BlackBerry, and pay attention to the task at hand

By Bruce Weinstein, PhD

I'll never forget how great I thought it was when I first discovered multitasking on my computer. Suddenly it was possible to switch between tasks seamlessly; with multiple windows, tabs, and programs open simultaneously. I could write articles, check e-mail, do research, and build spreadsheets—barely pausing between activities. I felt as if I were doing everything at once. It seems like ancient history now, but being able to move quickly and smoothly from one activity to another on a PC was nothing short of a revelation.

But then a funny thing happened: I noticed that the more things I could do with ease on my computer, the harder it was to focus on any one activity. My natural inclination to jump from one thing to another prematurely was now aided and abetted by technology—the very thing that was supposed to be helping me. Then, after the PDA and cell phone became a part of my daily life, I found myself, like millions of others, faced with even more interruptions, and it became increasingly difficult to concentrate. The technological advances that once seemed so liberating had become oppressive.

I came to realize that multitasking isn't something to be proud of. In fact, it's unethical, and good managers won't do it themselves and will not require it of those they manage.

Here's why multitasking is unethical.

When you multitask, you're doing a lot of work, but you're not doing most (or any) of it well. A new study published in the Proceedings of the National Academy of Sciences revealed that people who fired off e-mails while talking on the phone and watching YouTube videos did each activity less well than those who focused on one thing at a time. Psychiatrist Edward M. Hallowell, author of CrazyBusy: Overstretched, Overbooked, and About to Snap! (Ballantine, 2006), puts it this way: "Multitasking is shifting focus from one task to another in rapid succession. It gives the illusion that we're simultaneously tasking, but we're really not. It's like playing tennis with three balls."

Truck Crashes

We're in the early phases of understanding fully what multitasking involves at the neurophysiological level, but the emerging research suggests that multitasking reduces rather than enhances the quality of our work—and our lives.

A multitasker behind a desk is unproductive. A multitasker behind the wheel of a car is a potential killer. A study from the Virginia Tech Transportation Institute found that when truck drivers texted, their collision risk was 23 times as great as when not texting, according to a report in The New York Times. The Times also reported that University of Utah researchers showed that talking on a cell phone while driving quadruples the rate of crashing, a statistic equal to what happens when people drive drunk.

These studies led the U.S. Senate to propose legislation last month that would prohibit texting or e-mailing while driving. (Texting behind the wheel is illegal in 14 states now.) The number of businesses and advocacy groups that endorse such a policy is growing rapidly; the Governors Highway Safety Assn. signed on this week.

A bank executive I know frequently complains about how distracted her boss is during staff meetings. The boss—I'll call him Eric—reads and writes e-mail and makes calls while briefing the staff. "I'll ask Eric a question about an assignment he's given us," my friend complains, "but he's so immersed in what he's doing that I have to repeat my question a couple of times. It ends up taking me three times as long to communicate with him." Eric isn't a bad person. But he's not a good manager, either.

Since multitasking interferes with the ability to do one's job well, the good manager sets an example by focusing on one task at a time. You can't expect the people you lead to resist the urge to multitask if you can't do so yourself. You've probably been annoyed when a clerk is more interested in his or her phone conversation than in assisting you. Why, then, is it O.K. to do the same thing when you're working with your team?

In Control? Or Being Controlled?

Yes, I know it's hard to put those devices away, even for a few moments. I'm not sure whether BlackBerrys and iPhones cause attention problems or simply make those who are susceptible more prone to them. It doesn't help that everywhere we go, we're surrounded by people who are absorbed in their electronic gadgets. What it comes down to is this: Are you controlling the technology, or is the technology controlling you?

An actor I once knew had a catchy slogan on his business card: "Always there. Always ON!" It was a memorable way to let casting directors know of his commitment to his work.

It seems as though employers too expect their employees to be "always on"—online, on e-mail, or on call. But this simply isn't fair. Employees deserve to have time away from work, and managers should respect their down time. This makes sense from a business perspective, also: Employees who can recharge their batteries and don't feel pressured to be "always there, always on" are more likely to do good work when they're on the job.

For the past three years in this column, I've tried to show how doing the right thing makes good business sense. Respecting an employee's right to be left alone for a portion of the day is a shining example of this.

Technology is morally neutral; it can be put to good or bad use. Managers who want to make the best possible use of technology will take the following guidelines seriously:

1. DO ONE THING AT A TIME.

Focusing on the task at hand is the best way to get the job done. Multitasking may feel effective, but it isn't. "Monotasking" maximizes your own productivity and serves as a positive example to others.

2. RESPECT THE PERSONAL LIVES OF THOSE YOU MANAGE.

Boundaries are good, and good managers honor them.

3. DON'T ALLOW YOUR TEAM MEMBERS TO MULTITASK WHILE DRIVING.

When you're on the phone with a guy who tells you he's behind the wheel, tell him to hang up immediately and get back to you when he's out of harm's way.

4. GIVE YOURSELF A BREAK.

The ethical principle of love and compassion applies not just to how you treat others but how you treat yourself, too. You're entitled to watch a movie all the way through or to have a nice meal without looking at your e-mail. And let's face it: There aren't many e-mails so urgent they can't wait a few hours.

5. REMEMBER WHY THEY'RE CALLED "SICK DAYS" AND "VACATION."

A person too sick to come to the office is entitled to convalesce without feeling pressured to work at home. This applies to management and labor alike. The same is true for those on vacation. And as for those who have lost a family member or who have just gotten married: If ever there were a time when someone ought to be free from multitasking, surely it's this.

2010-01-27T07:44:00.000-08:00

I recently found this very interesting article. It discusses how ethics and the workplace are being affected by diversity and technology, and how these changes influence ethics. Technology has been the most difficult to monitor in regards to ethical practices. How do we monitor such a thing like ethics, when technology makes it a challenge for us to do so? This is the question that is affecting businesses around the world today.

Shaping the Workforce of the Future

Reckoning with the two great changes of our time—diversity and technology—while acknowledging what's constant in human nature can help us adapt to changes in the the workplace

By Barry Salzberg

http://www.businessweek.com/managing/content/oct2007/ca20071025_473242.htm

Predicting the future of U.S. business is a difficult endeavor. Someone looking ahead in 1977, the year I joined the workforce, might have talked about the effects of speedier electric typewriters—completely missing the pending computer revolution. And they also might have missed the diversity revolution, which would see white men being joined by ever-increasing numbers of professional women and men of every race.

The effects of those two transformations will continue to be felt over the next 20 years, as they change how—and, to some extent, even why—we do business. And ethics will continue to be a touchstone for business, showing us the true natures of those designated as leaders. I believe consideration of these three factors—technology, the increasingly diverse workforce, and ethics—will help us shape the workforce of the future.

Revolution No. 1: Freedom Through Technology

Technology has thoroughly reshaped the way we do business and, in particular, the expectations that members of Generation Y (those born after 1980) have about the way we should be doing business. Today's technology has given all of us unprecedented freedom and the power to access information whenever and wherever we need it. Gen Yers are without a doubt more at ease with this technology, having grown up with it, than the rest of us. They derive so much pleasure from it that they cannot imagine why we elders seem so insistent that work needs to be done in a set place, at a set time.

Future advances in technology will make workers more effective by enabling more collaboration. Improvements in knowledge capture and integration will speed up delivery of products and services. Workers will also be more contented, leading to improved retention, thanks to the freedom technology provides for flexible schedules and reduced (or eliminated) commuting time.

But whatever digital wonders may develop in the future, work will still be about three things: connections, connections, connections.

Human connections can be facilitated by technology—as the rise of social networking has shown us—but they still happen best in person. So offices will continue to be vital for socialization. In the past, the ratio of individual work to socialization (collaborative work or water-cooler chat) was 80:20. In the future, that ratio may become more like 20:80 for vast numbers of our employees.

People-to-resources connections include making sure people have the knowledge, technology, tools, capital, time, and physical space to generate superior results. As workers seek more elasticity in where and when they work, collaborative, real-time technologies that boost knowledge sharing and encourage the free flow of ideas will become more essential.

The final set of connections is "people-to-purpose." New communications tools such as podcasts and streaming video will no doubt become mainstream. Yet building and retaining a sense of personal and organizational mission will play an integral part in establishing a company's culture, values, and sense of purpose. In fact, introducing recruits to the company's processes and real-life environment seem hard to do without spending time at the office.

Revolution No. 2: Customized Careers for a Diverse Workforce

By 2012 the U.S. will likely have a shortage of some 10 million knowledge workers. That's almost the inverse of the situation my fellow baby boomers and I encountered when we entered the workforce. With so many of us scrambling to fill so few jobs, employers could afford to be choosy. They could also be selective on the diversity front, under-utilizing women and people of color in the talent pool.

Fortunately for all of us, that world is long gone. Women and people of color, as well as lesbian, gay, and bisexual professionals, have made significant gains and change will continue and accelerate as demographics catch up with the staffing needs of growing businesses.

There are already four generations represented in today's workforce. Ageism will continue to fade as businesses welcome baby boomers back from retirement.

Today, Gen Y may have some difficulty understanding older workers—and vice versa—but as far as diversity of gender, race, and sexual orientation, our youngest employees today take that as a given. They expect the workplace to be filled with people who don't look like them. And they expect that companies will nurture their careers while also helping them integrate those careers with their family life and non-work interests.

Things that managers today might view as perks—flexible work arrangements, executive coaching, affinity groups—will become integrated into the fabric of the workplace. Instead of offering one-off flexible arrangements geared to working mothers, companies will recognize that all employees have times in their careers when they might want to decelerate—or accelerate—along the career track. Career customization will allow people, even in a highly service-oriented profession like accounting, to work when and where they choose.

The Touchstone: Some Things Never Change…

Ethics have been the foundation of business for thousands of years. But how do you monitor the ethics of workers you never (or rarely) see? How do you know they are working all the hours they report? How do you know they're not bending the rules or—worse—colluding in fraud? Without peers right there to guide a co-worker, will he or she be more likely to slip off the ethical straight and narrow?

According to a 2006 poll commissioned by Deloitte & Touche USA and Junior Achievement in connection with our “Excellence through Ethics” curriculum, 22% of high-schoolers said they would act unethically to get ahead if there was no chance of getting caught. The good news is that just three years earlier that number was 33%—so it's coming down. The bad news is that unless they reevaluate their moral codes during college or graduate school, we can expect that more than one in five of our future workers may cheat.

The diversity and technology revolutions may have changed much about business, but no revolution will ever make unethical behavior acceptable. How and when we teach and enforce ethics to a dispersed workforce…that's a question about the future that we cannot duck.

No matter what new technologies develop, the most important skills will remain the ability to learn and to think critically. Many skills treasured by previous generations were made obsolete by computer software, and so were the workers who lacked the flexibility to adapt. We cannot know which jobs will be superseded by technology in the future; we can only know, without a doubt, that some will be. And the reverberations will be felt in an ever more diverse workforce.

Of course, business always changes. That's the nature of the beast. But for those who are prepared to adapt, it will be an exciting ride.

Bring in a New Decade

2010-01-21T05:59:00.000-08:00

As I was reading through various lean manufacturing and lean six sigma articles, I stumbled upon this really interesting article on how lean six sigma will influence current business practices. As we begin this new decade, various technology, the economy, consumerism and service are shaping the way organizations everywhere are doing business. The trend is lean. Let’s get with it.

How the Trends of 2000-2009 Will Shape Performance Improvement in This New Decade

Author: Debashis Sarkar

http://www.sixsigmaiq.com/Columnarticle.cfm?externalID=1757&ColumnID=15

As 2010 ushers in, it’s time for us to look at the key trends that surrounded the ecosystem of all businesses. These trends provide a cue into the way the engine of performance improvement will be driven going forward. Organizations serious about customers and improvements will find it difficult to neglect these events. While leading business transformation initiatives, change agents will have to enmesh these trends with their knowledge of quality/improvement methods and techniques. These trends should not only be an integral part of the transformation process but also play a part in the final solutions. And they would touch a myriad of facets of business such as product development, customer engagement, acquisition, human resources, costs, profitability, distribution, processing, risk management, cost and so on. So what are these trends and the takeaways for performance improvement leaders?

1. Power of Social Networking Sites: Something That Companies Can No Longer Ignore

Did we ever think about social networking sites pre-2000? Maybe not, but in the last decade, we have seen how these sites have become an integral part of our lives. Social networking sites such as Twitter, Orkut and Facebook have grown in use and importance, and businesses can no longer afford to ignore them. Companies have began using these social media sites to carry out market research and even test possible product and marketing ideas; for instance, Citibank turned to Facebook to ascertain acceptance of its new Citibank Air Asia card launched in Malaysia.

In addition, companies have started looking at social networking sites as another channel to respond to customer concerns and queries. For example, Wells Fargo has a team that responds to queries on checking, savings and online accounts though Twitter. Social networking sites have also been used to deepen customer engagement; for instance, Walmart uses Twitter to create engagement by sharing what is happening within the company and exposing the community to its unique culture.

Take Away: While looking at performance improvement projects, leverage social networking sites to connect with customers to collect their feedback, test out products/solutions, etc. Social networking sites provide immense possibilities that have still yet to be fully leveraged.

2. Democratic Consumerism: Tacit Expectation of Today’s Customers

In October 2009, ASDA Chief Executive, Andy Bond. talked about “Democratic Consumerism,” a way of doing in business in which consumers dictate the way the companies do business and also dictate what products companies sell. Customers are considered as partners and are involved in all aspects of the business. This emanates from a belief that because customers have a diminishing trust in government and business, they have a growing demand for more openness and transparency. As a result, Bond launched a series of initiatives at ASDA in order to make the otherwise opaque company more transparent to customers. These initiatives are: 1) Your Asda: a blog, which introduced a number of webcams to provide a view of the company’s operations, including a dairy farm, carrot processing plant, and its head office, Asda House, in Leeds; 2) Chosen by you: Beginning Jan 2010, customers can get involved in product development, packaging etc. by logging on to www.asda.com/yourasda; 3) Bright Ideas: Customers who come up with brightest ideas that saves the business money will be financially compensated. If an idea saves ASDA £2 million, the customer will be awarded £100,000.

Take Away: Make your organizations transparent to customers and win their trust. Involve them in ideation and product development, and communicate with them not only what you are doing but also why you are doing what you are doing.

3. Complexity Reduction: Silent Threat Faced by Companies

Complexity is a problem that tacitly weakens organizational performance and is difficult to detect. While the concept is not new, leaders in the last decade had started realizing the importance of complexity reduction. As early as 2001, Larry Ellison, CEO of Oracle, talked about “War on Complexity” in computer software. One of the major reasons for complexity is proliferation. Complexity gets added to organizations because of multiple products, different channels, suppliers, locations, mergers and acquisitions, etc. As the pressure of growth builds, companies inadvertently do things that they should not do. In the Western world where growth is limited, organizations have been flooding the market with multiple products, more distribution channels, etc., all with the expectation to gain new customers. In emerging markets, companies are doing the same but with expectations to garner market share in the growing market. As businesses worked towards catering to varying consumer needs, they have adopted newer processes and complex technologies, which not only made businesses complex but also added to cost.

Just look at the financial services domain. Earlier we just had a branch for the customer to carry out transactions, while today we have multiple channels such as Internet, mobile-phone, television, phone, ATM, etc. A financial services company may have a large number of credit-cards/co-branded cards, but most of them may not really contribute to desired revenues. A closer look can show that only a few of them really make a positive contribution to profits. The impact of complexity results in higher customer lead times, depleting profits, slower decision making and irate customers and so on. Clearly as organizations grow, they will have to install metrics that can measure complexity and associated hidden coordination costs within the company.

Take Away: Identify the key drivers for value and proactively engineer simplicity for customers and employees. Focus on what’s important—the bulk of value creation happens in 20-30 percent of your offerings. Shun the mindset of market-share and instead focus on value-share. After getting rid of products that do not generate economic profit, work toward reducing the complexity within your company.

4. Technology Solutions: Enabler for Business Process Improvement

While service businesses’ adoption of information technology happened in the late 1990s, the last decade saw the use of technology solutions for customer convenience, operational improvements, security enhancement and business expansion. One thing became very clear: technology adoption is going to be a part of many process improvements. Forward looking practitioners made sure that when they used process improvement methods such as Lean, Six Sigma, etc., technology was very much an option which was kept by successful streamlining of processes. Companies adopted key technologies such as mobile banking, RFID, smart cards, biometrics, and grid computing and so on. For example, Indian financial institutions such as ICICI Bank, Union Bank, Indian Bank and Corporation Bank began using biometric solutions for underprivileged masses both in the rural and semi-urban areas. ICICI Bank provided mobile and TV banking to provide better customer convenience. Walmart began using RFID for tracking cases and pallets of supplies. Organizations looked forward to technology for providing greater security to customer transactions. There are a plethora of examples from around the world.

Take Away: Remember that process improvement methods (such as: Lean, Six Sigma) and technology solutions are not oxymorons but can complement each other. While leading process transformation, do look at technology solutions if there is a need and business case. Of course, this does not mean that you should automate a waste-laden process/business system.

5. Lean for Service: Quality Improvement Approach of the Next Decade

While Lean has been around for more than two decades, the services business saw its adoption in the early 2000s. In 2003, the Harvard Business Review reported the first case study on Lean adoption by a service company, which was Jefferson Pilot Insurance (the company was acquired by Lincoln Financial in 2006). In Asia, ICICI Bank led its deployment of Lean in the early 2000s. Since then, a large number of service companies have adopted Lean (in isolation or with Six Sigma) as a method for performance improvement. Companies in financial services, healthcare, education and hospitality have reported successes. Bias for action, team work and quick results has helped this practice to get into the mindset of business leaders. While we still do not have a Toyota of service businesses, Lean is going to be an important engine for business process improvement going forward.

Take Away: The next decade will see this practice taking center-stage of services performance improvement. Hate it or love it, you cannot ignore it. I am confident that by the end of 2019, we shall for sure see the Toyota of service businesses in the horizon. This handful of companies will have institutionalized Lean thinking as a part of their culture.

6.Service Differentiation: Evergreen Strategic Weapon for All Businesses

Service as a concept is not new. However, the last decade has reinforced the fact that differentiating through service is the only way forward for many businesses. Companies have realized that as products get commoditized, differentiation becomes a big challenge. Even if companies launch new products sooner rather than later, their products get copied by others and their unique selling proposition is lost in the marketplace. In such a context, quality service can be a distinct differentiator that competitors will find difficult to compete with. This will be possible when companies provide a superior experience and cater to customers’ demands that are valued by customers.

Service companies across the spectrum realized this importance in the last decade. Take the example of the banking sector. The financial tsunami in 2008 has made life difficult for banks. Getting deposits has never been so difficult. These banks have realized that superior service is a way to gain a competitive advantage and increase the share of their wallets. There are already a few successes on the horizon. For example, at Amazon.com, CEO Jeff Bezos has stuck to his vision of creating a world-class retailer with a focus on creating a superior customer experience. His persistence has paid off. In October of 2001, Amazon.com traded at $5.51; in December of 2009, it traded at an all-time high of $145.91. By the end of December 2009, Amazon.com shares traded near $135, still a 2,400 percent leap off the low. Clearly, creating a superior customer experience does pay off in the long run, and it will continue to be a big part of the agenda for performance improvement professionals today.

Take Away: Embed superior customer experience as part of the agenda for business enhancement. Relentlessly get the basics of service performance correct and look for opportunities to exceed customer expectations. Creating exceptional experience does not have to cost a lot of money; it just requires an alert company staff that is willing to go out to better serve the customer.

Updates

2010-01-13T10:14:00.000-08:00

Hey everyone-

We are in the midst of making a lot of updates to our website. We want to make it easier for our customers and potential clients to navigate our social media pages, so we will have links to each of our pages on www.han-tek.com. Keep checking the website and our pages for more of our updates!

Also, Han-Tek is being nominated for the RBEA, Rochester Area Business Ethics Award. The whole nomination process is very time consuming, but well worth it in the long run. Being nominated will show the Rochester community that Han-Tek is an ethically sound company who practices morals and ethics in every business transaction.

For anyone who wants more information on Han-Tek and their material handling solutions, please email: info@han-tek.com

For the media, if you are interested in running a story, please contact me at: AMangione@Han-Tek.com

New Things Happening: Come visit often!

2010-01-05T08:20:00.000-08:00

Hello Everyone!

Thanks for coming to our blog page. We thank you for taking interest in Han-Tek and seeing what we do. As Han-Tek's PR Specialist, I have been busy updating all of our social media, sending out Press Releases, maintaining our media contacts, writing case studies and updating our client newsletter.

I can already tell that the month of January is going to be a very, very busy month here at Han-Tek!!! To be honest, I love busy! This means that I am doing my job and making sure Han-Tek is getting the amount of exposure and recognition for their projects.

If you would like to learn more about Han-Tek or would like to contact me, here is Han-Tek's website: www.han-tek.com. Our website is in the midst of being updated. We have some new Press Releases that will be posted as well as links to all of our social media pages.

Please keep checking in for all of our new updates.

Thanks for reading!!!
TTFN....
:)

Welcome to our blog!

2009-12-21T13:27:00.000-08:00

So you’re probably wondering ‘what does a automation and integrated materials handling solutions company blog about’. Let’s be honest…you’re probably wondering ‘What in the world does a automation and integrated materials handling solutions company DO’! So let’s start there. Han-Tek has moved everything from micro chips for IBM to locomotives for GE. We have worked in the renewable energy industry and the distilling industry. We’ve handled plastic bottles (preforms) in their movement from the injection modeling process to the blow molding process.

The question: What’s the common thread?

The answer: In each case we are moving products into and out of some kind of manufacturing process or application.

· The micro chips were being staged and moved into and out of an annealing oven

· Locomotives were moved on air-bearings as part of a lean manufacturing initiative

· renewable energy, most recently 20’ gears were moved into and out of charging ovens and subsequently into a curing tanks

· distilling industry – pallets of empty bourbon bottles were de-palletized, singulated, oriented and prepared for de-casing

· The preforms were conveyed from blow molding to either storage or directly to blow molding

Just as importantly each one of these project needed to be custom designed and engineered to meet our customers unique and exacting needs. Today Han-Tek focuses on a number of unique applications: Conveying, Handling, Loading, Unloading, Palletizing, Dip Tank/Curing automation, Depalletizing and front-middle-end of line integration. Using the exceptional skills that our in-house mechanical and electrical engineers bring to the table we take on the tough jobs ‘when off-the-shelf just won’t handle it.

Check in again for more information about case studies, automation and integration materials handling challenges and more information about what effect these solutions can have on the efficiency of your facility.

Han-Tek, Inc.’s Food Preparation Table

2009-12-17T06:45:00.000-08:00

Han-Tek, Inc.’s Food Preparation Table