Lean Manufacturing in Practice – Bittercube

In this blog series, I’m showcasing products manufactured in my home state of Wisconsin. In addition to sharing some fun facts about the various companies and their products, I’ll be highlighting the Lean Manufacturing Principles that are best exhibited at each respective organization. These principles are derived from the Japanese manufacturing industry and center on making obvious what adds value while reducing waste muda. The six Lean Manufacturing Principles are: 1) Workplace safety, order, and cleanliness 2) Just in Time (JIT) production 3) Six Sigma quality 4) Empowered Teams 5) Visual Management 6) Pursuit of Perfection.

A cocktail renaissance has swept across the country, inspiring a new fascination with the ingredients, techniques, and traditions that make the American cocktail so special. The use of bitters, liquor that is flavored with the pungent taste of plant extracts, has been gaining popularity over the past decade. Originally developed for medicinal and digestive purposes, bitters now serve mainly as cocktail flavorings. The alcohol functions as a solvent for botanical extracts as well as a preservative.

Milwaukee has contributed to this cocktail renaissance with the help of Bittercube. Founded by Nicholas Kosevich and Ira Koplowitz in 2009, Bittercube handcrafts eight varieties of artisanal bitters, using only naturally sourced ingredients. By happenstance, the operations are run from the location that Foamation once occupied. Milwaukee was perceived as an untapped market with room to grow. Also, the low cost of operating expenses allow for maximum revenue generation.

Henry Ford created the first all-inclusive manufacturing strategy. However, it was Eiji Toyoda, a Japanese engineer, who after analyzing Ford’s methods, improved upon them by keeping an eye out for waste. Waste (or muda in Japanese) refers to any kind of wasted motion, effort or materials in the manufacturing process. Toyoda popularized the concept of Reducing Waste, which has become a basic tenet of Lean Manufacturing and falls under the principle of Pursuit of Perfection.

The objective of Lean is that every step must add value and be waste-free. A non-value added, or wasteful activity is one that neither adds value to the customer nor provides a competitive advantage to the organization.  Some non-value added activities include waiting and inappropriate processing. Waste can also take a tangible form, such as idle raw material or defects. Although transportation is an important aspect of the manufacturing process, it is a non-value added activity, as it adds to cost but not to value. It should be noted that some non-value adding activities like accounting and regulations are important and cannot be avoided.

The continuous Pursuit of Perfection encompasses the idea that one must always strive to eliminate waste in the organization, while constantly making improvements, even if those improvements are small and incremental.  Improving processes results in reducing or eliminating variation, and improving the process flow or speed. Learning and consistent measures for improvement should be part of all processes if an organization intends on growing.

Bittercube has reduced waste by improving on their processes. In the past, they used a generic, high-density plastic container to process the bitters. There was no way to remove the botanical material after the batch was processed, other than to climb into the container and physically remove it by hand. Although this left the person who cleaned the container smelling of cinnamon, cloves, and vanilla, it wasted time and did not add value to the process. They have since updated to a custom-built processing/cooking tank with a bottom compartment where botanical material can easily be removed and cleaned.

Bittercube previously used generic boxes that weren’t cost efficient to ship. They have since opted for custom-made boxes with dimensions that maximize the number of bottles in each box, thus reducing wasted space and shipping costs.

Lean supports the notion that nothing should be wasted and a use must be found for everything. Bittercube has also reduced tangible/physical waste by reusing and recycling the processed materials. Instead of discarding the used botanicals, Bittercute has begun composting these materials. The finer botanical sediment will be reused in other products, such as an ingredient for Purple Door Ice Cream.

Autumn is upon us! Try this seasonal Maple Old Fashioned recipe!

2 oz. Johnny Drum Private Stock Bourbon, Fat .25oz. Maple Syrup, a dash of Jamaican #2 Bitters, a dash of Bittercube Bolivar Bitters, Garnish: Fat orange peel

To view other recipes and product offerings, visit Bittercube.

To read more about bitters, visit The History of Bitters

For more information on Lean Manufacturing see: Lean Waste Stream by Marc Jensen, Lean Enterprise: A Synergistic Approach to Minimizing Waste by William A. Levinson and Raymond A. Rerick, and Learning to See: Value Stream Mapping to Create Value and Eliminate MUDA by Mike Rother and John Shook

Wise up! Grow up!

OK. I am more than a little weird. I find valuable change management lessons from varied sources like the animal kingdom, daredevil cyclists, the great American roadtrip, and I hang out with people who think in similar bizarre ways.

Because my household now includes a boomerang young adult in residence while in grad school after years of independence, the lesson du jour is this:

Sometimes it’s not just tasks or individual behaviors that need to change (because you can’t even list them all).

You need to change the fundamental relationship, and everything else flows from there.

It’s the same for IT, the enterprise apps, and the end user community:

Behaviorwise, it’s:

Out with the OLD!

• Ask IT to run a query
• Wait for an overnight report to print
• Ask sales to ask their key customers for feedback
• Monthly buyers’ meeting to review supplier performance
• I’ll review it Monday when I am back in the office

 

In with the NEW!

• Do it yourself drilldown
• View it graphically onscreen NOW
• Analyze social media sentiment directly
• Real time supplier scorecards
• I can check the stats while I wait for lunch

 

 

The IT/End User Relationship needs to GROW UP from this:

 

 

 

 

 

To this:

 

 

 

 

 

IT should only provide the essential services (keep  the servers up and running, maintain  the database, keep  the application patched, and administer  security). The End User should engage directly with the application to interact with business information without begging IT for every query or report or view.

These basic skills around information self-service are an important part of getting through the change management curve , and you should begin stressing them even before training users on core transaction processing.

Be a good IT parent: give your end users the life skills they need to grow up.

Does your training plan devote enough time, the right exercises, and tips to help users master  basic skills?

Are you letting people know how the new software will empower them to get the answers they need without begging time from IT?

Are you testing end users for mastery?

If you don’t….don’t say I didn’t warn you….

he will be in your basement FOREVER

Don’t say I didn’t warn you!

The Invincible Adolescent Corporation

In my last post, I talked about the importance of being prepared for potential product recall disasters. With recalls so much in the news, I can’t stop thinking about it. Today’s question is:

Who is most at risk for failing to prepare a rapid recall response plan?

It’s the adolescent companies! They are like teenagers who think an auto accident can never happen to them. You can neither sell them prudence and preparation, nor can you convince them that they are at risk–Because their brand has become the brand of the cool kids (social media savvy hipsters) they believe nothing bad can happen to their company, their product or their relationship with their consumer fanbase.

Take a look at two popular brands that have suffered recalls , and how vastly different the responses have been:

• Lululemon is now reselling refurbished not so sheer yoga pants at a generous 6% off their original price! Seriously?
• Earthbound Farms never thought their healthy spinach would actually sicken people, yet it was linked to an E. coli outbreak that sickened 200 people and three people died. Unlike Lululemon’s attempt to minimize their losses by re-imaging their refurbished see through pants, Earthbound made a significant effort to reduce risk.

This type of risk reduction is of course the first and best line of defense.  But  recalls still abound. Of course, there are now recall watching apps available, such as:

• Consumer Recalls
• Recalls
• US Government Product Recalls

but the producers should be responsible from preventing dangerous products from reaching the marketplace.

I don’t know about you, but I am hesitant to resume purchasing after a recall, because so many companies seem to handle them so badly.  It doesn’t have to be this way.

So kids, listen up.  Yes, I mean you, the well loved brands of the cool crowd.

Planning is mandatory. A comprehensive approach needs to include well planned recall incident response, and this plan must be exercised with mock drills periodically.

Are you ready? Take the first step and find out. Take a short self-assessment, and see how you score across the key readiness categories.

The Lake of Unclear Benefits

Source: harrypotter.wikia.com

So the decision comes down, your company is moving forward with new ERP. Congratulations on your decision; just remember, a year or so from now, that ERP implementations are potentially the next great, bloody spectator sport. They are not for the weak or those lacking determination. Decision made, presumably based upon a business case that documented the expected benefits and how you are going to get there. If so, continue. If not, then you’d probably better back up a bit and get all of your bunnies in a row because, in either case, now you have to communicate why you are doing this project.

So whom do you have to communicate with? How about: anyone who will be impacted by this project. Certainly that includes directly impacted end-users and their supervision and management. It also includes people in other organizations that may not be included in the initial project, this might be HR or some other organizaton. Why communicate with them? Because they will hear about the project and will naturally have questions about it, including why they are being included in the scope of the change, especially if they are unhappy with current systems and processes.

What needs to be communicated at this early stage? Frankly, it does not have to be complicated. It almost always begins with “We are moving to new ERP because…” and then you simply fill in the blank. This is also a good time to develop a good 15-20 second answer. Why? To get the key points across quickly. That said, you absolutely MUST be ready to provide details regarding what specific goals exist, by area/location, and how you expect to get there. Elevator speeches can only go so far – it takes details to calm people who are fearful of change.

We actually get asked frequently, “why do we have to communicate so early about the reasons for our new ERP project?” Our answer is pretty simple: because if you don’t, people will fill in the blank themselves. And you won’t believe what they will come up with, most of it from the depths of fear, distrust, or native suspicion. Here’s what we’ve heard people come up with:

So, why are they doing this to us (again)?

To get the company ready to sell (and all of us are going to lose our jobs)

To increase automation and efficiency (and all of us are going to lose our jobs)

Here we go again, more churn, churn, churn and someone else gets the butter (and we are all going to lose our jobs)

Get the point? If you don’t provide a good answer in advance, people will answer their own questions in the most negative possible way.

Your communication of the reasons or rationale for moving to new ERP is merely the start of a good communication strategy and plan – not the end of it. Oh, yeah, if you don’t have a comprehensive communication strategy and plan, it is most definitely time to get one. And for pity’s sake, if you don’t know how to do this, call someone who does. Everyone who depends on the future ERP system will eventually be grateful.

Lack of concerted communication to end-users about the reasons behind the implementation, the anticipated benefits stemming from successful adoption and the ways in which each individual end-user and executive are impacted will affect project success or failure.

Mitigation Step: Create and follow a comprehensive organizational change management plan – at the very least, get an expert involved to do an assessment of readiness and challenges.

Is ERP Success Really Such a Secret?

ERP isn’t just big business, it’s huge business, projected by those who know to break $50 billion yearly by 2015 in software sales, maintenance, development, and services. Thousands and thousands of companies undertake ERP investment and implementations yearly. There are millions of pages on the Internet about how to make ERP projects successful. And hundreds of firms and thousands of people exist whose life-blood is implementing ERP solutions.

So why does ERP so often fail to deliver? According to some, you’ve got a fifty-fifty chance to satisfy half of your goals for the investment. So, if I plan to drive to Dallas and only get half way there, is that a successful trip or a failure? I may have enjoyed the journey while it lasted, but then I ended it in Abilene, not Dallas. That is not a successful trip. It is a sure ride to the Desert of Disillusionment.

Failing to deliver the desired business value means the project was a failure regardless of whether it was on-time, on-budget, or on-scope. It failed. Let’s hear that again. It failed. Sure, everyone got to keep their jobs because the project concluded reasonably close to the schedule and within some allowable contingency of the targeted budget. Success, right? Well, not if you wanted to get further it isn’t. It failed.

How can that possibly continue to happen? The ERP landscape is enormous. Almost every business – particularly those involved in manufacturing or distribution – use or want to use ERP software. Certainly people know better. There are thousands of really experienced, smart people guiding and informing these projects, yet they continue to fail to deliver fully against expectation and goals.

Is the problem that goals are too high? I sincerely doubt it, as companies engaging in ERP projects rarely agree to document their goals in writing or in measurable ways, paying only lip service to “productivity gains” or “improved efficiency”. So if the goals aren’t the problem, what is? You can read for years about better project management, better leadership, a better implementation process and still miss the boat.

The bottom line is simply this: software does not drive a business. People do. And if you don’t empower and support people, all the technology in the world won’t move your business forward. This is something we’ll explore further in subsequent posts. But stay tuned as we drill into how to turn the discussion on ERP success on its head.

Top 5 Warning Signs you are on the ERP Desert Highway

There are many wrong turns on the road to the Desert of ERP Disillusionment.  Some teams go wrong right out of the gate. Here are the top five warning signs that your real destination is not the pinnacle of ERP success, but the dry parched sands of the desert.

1. Your steering committee is texting while driving. If your key decision makers are multi-tasking through every steering committee session, its easy for them to miss critical information they need to actually steer.

2. The distraction of backseat squabbling causes the PM to miss a turn.  Political infighting and lack of alignment among key stakeholders can be as difficult to manage as any carful of kids on a family roadtrip AFTER you have taken away their favorite electronic toys.

3. The driver is looking in the rearview mirror instead of the road ahead.  While there are some lessons to be learned from your last ERP implementation (how long ago was that?) , modern state of the art systems require significant behavior changes in the way users interact with information in the system.   If they are used to greenbar reports laid on their desks every morning, the gap may be too big to jump. 

4. You read a guidebook about the wilderness once….  You can’t learn all your survival skills from a book.  In life threatening terrain, there is no substitute for having an experienced guide on the team.  If you haven’t put experienced change leadership into place before you bid your consultants goodbye, you will have neither the insight to recognize the warning signs, nor the skill to lead your people out of the desert.

5. You ran out of gas!  You didn’t fill up at the last station because the ATM was out of cash, your credit card is maxxed out,  and you used your last dollars on Slurpees and Twizzlers for the kids.  If you fritter away your project budget on non-value added-customizations like moving fields on forms and cosmetic report changes, you won’t have money left to address any business critical requirements that come up late in the game.

(Hat tip to Mark Farrell for #5!)

Keeping the Black Swan at Bay

A recent article in the Harvard Business Review highlighted some alarming statistics on project failures. IT projects were overrunning their budgets by an average of 27%, but the real shocker was that one in six of these projects was over by 200% on average. They dubbed these epic failures the “black swans” of the project portfolio.

The article ends with some excellent advice on avoiding the black swan phenomenon, but the recommendations focus on two areas:

• Assessments of the ability of the business to take a big hit
• Sound project management practices such as breaking big projects down into smaller chunks, developing contingency plans, and embracing reference class forecasting.

We would like to add to this list a set of “big project readiness” tasks that offer additional prevention of your next big IT project becoming a black swan.

Project Management Readiness: If you don’t have seasoned PMs with successful big project experience on your team, you need to fill that staffing gap either permanently or with contract help for the big project. Yes, you need an internal PM even if the software vendor has their own PM.

Data Readiness:  Address your data quality issues now, and establish data ownership and data governance before you undertake the big project.

Process/organization/change management readiness: Are your current business processes well documented? Is the process scope of the big project defined correctly? Are process owners clearly identified?  Do you have the skills and framework for defining how the software may change your business processes, organization structure and headcounts? If not, you run a significant risk of failing to achieve anticipated ROI for this project. Do you have a robust corporate communication framework? Do you have the resources, skills and experience to develop and run training programs in house?

Let’s face it: experience matters. If you’re already struggling to recover from a technology black swan, you are at considerable risk for reproducing the same level of failure if you don’t undertake a radical overhaul of your approach by identifying and addressing every significant weakness in the areas noted above.

We have developed a project readiness assessment model that can help you understand your risks and develop an action plan for addressing them before you undertake anything as mission critical as an ERP replacement, CRM implementation,  legacy modernization or other mission critical technology project. If you have a big project on your radar (or already underway), contact makewaves@edgewater.com to schedule a pre-implementation readiness assessment.

How does your company handle major change?

Although many large technology initiatives fail because an inadequate or inefficient change management framework, many companies still lack a consistent approach in supporting their employees and external stakeholders through major system implementations and other significant business initiatives.

 

 

There are many reasons for this.

• The roles and responsibilities for communication, training, and monitoring performance remain vague.
• The approach varies from department to department.
• Information is pushed out once in the wrong format (usually by email) and not made available on a portal under version control. We see this often in companies that have an immature or outdated collaboration style.

We’ve put together a short poll on change management approaches. Please take a moment to tell us how your organization handles major change, and share your thoughts in the comments.