Lean Marketing House » Foundation

Leading Lean from the Middle

admin — Thu, 17 May 2012 03:19:00 +0000

Paul Yandell of Value Stream Focus was interviewed in the Business901 podcast, Transforming Lean thru Middle Managers. This is a transcription of the podcast.

Paul Yandell is a manufacturing and supply chain specialist with strong skills in identifying and eliminating waste and improving operational performance. His particular strengths are building infrastructure to support turnaround and growth situations, building and leading teams in total quality environments and he is bilingual (Spanish).

Traditional vs. Emerging Thoughts on Pricing

admin — Fri, 27 Apr 2012 02:36:00 +0000

In the 1990s, we were led by the process methodologies of Lean, Theory of Constraints and Six Sigma. Better, Faster, Cheaper was the mantra. The goal was to gain a disproportionate advantage by leveraging internal resources to their fullest advantage. Many of us are finding that faster, better, cheaper is not the game changer that it once was. Not only do we have to improve, but we have to improve at a faster rate than our competition. Ref: Is Lean and Six Sigma a waste of time?

Typical pricing is based on research, focus groups, surveys, statistical modeling, and other techniques to get a better understanding of customers identifying trends, costumer preferences, and evaluate the relative strength of competitors’ positions. Organizations also organize consumers into segments that enable them to efficiently address consumer needs. The further you can define your segments, the more it is perceived as a competitive advantage. However, organizations can no longer feed products to customers, Kill the Sales and Marketing Funnel. Customers have the ability to access resources and information comparable to their suppliers and choose suppliers by their own definition of value and how that value should be created.

A focus on control and ownership of pricing is giving way to the importance of shared outcomes with customers and suppliers. Ownership is not as important as the way you influence resource allocation within the network. “The goal of the emerging company is not to own all the resources but to influence how resources are allocated by providing intellectual leadership for the entire network. The co-creation process also challenges the assumption that only the firm’s aspirations matter. Every participant in the network collaborates in value creation and competes in value” (1).

Traditional (T) versus Emerging (E) thought:

Unit of Analysis: (T) Organization vs. (E) Collaborative Network
Basis for Value: (T) Products/Services & Features/Benefits vs. (E) Co-created experiences and Value in Use (SD Logic)
Interaction: (T) Transactional based and goal to deliver faster, better, cheaper vs. (E) Series of experiences and goal to keep the game evolving
Infrastructure: (T) Limited by physical, financial and internal knowledge vs. (E) Access to resources through external knowledge and networks
Boundaries: (T) Limited by features and benefits offered vs. (E) Progressing through knowledge sharing

As we have moved into the Customer Experience Economy and as many feel we are at the threshold of the User Experience Economy. As a result, we have seen the rapid expansion of Design Thinking, Service Design and Lean Agile type methodologies gain traction. Service Design in my thinking being firmly rooted in Service Dominant Logic (SD-Logic) is the most applicable to the area of Sales and Marketing.

SD-Logic use of co-creation of value pushes the perspective on all areas of business to include pricing. Why should pricing be limited to what is available within the organization and their supplier network? Could your pricing structure access your customer communities as well? Organizing to access pricing from an extended network of suppliers, partners and customers to include knowledge, infrastructure, and financial capacity—can significantly expand the notion of available pricing structures.

If we view pricing as an outcome and value from the use of our product or service (SD Logic), should value not be based on the price of the service that the customer receives and our level of participation? Should Net 30 terms be replaced by a co-created funding process that allows for shared risks and greater rewards over the lifetime of the product? Can we co-create pricing with a customer? Are customers already doing it for us?

P.S. Would that not force product/services to strip away all features and benefits that don’t deliver on the needs of the customer? We now receive a “basic” smart phone and only add apps as needed. Realistically, would your life be simpler without every product you own being intelligent?

Book Resources for this blog:
The Future of Competition: Co-Creating Unique Value With Customers
The Service-Dominant Logic of Marketing

Blog Carnival Annual Roundup 2011: How to implement Lean Thinking in a Business

admin — Sun, 25 Dec 2011 03:55:00 +0000

Tracey Richardson’s How to implement "Lean Thinking" in a Business is my third and final blog review for the John Hunter’s Curious Cat Management Improvement Blog Carnival. Tracey is a trainer, consultant and principal of Teaching Lean Inc. She has 22 years of Lean experience and worked at Toyota Motor Manufacturing KY as a team member, team leader and group leader in the Plastics Department from 1988-1998. She has over 460 hours training in Toyota Methodologies and Philosophy and currently is a trainer for Toyota, their affiliates in North America, and other companies upon request. Tracey experience in Toyota methodologies including: Lean Problem Solving, Quality Circles, Lean Manufacturing tools, Standardized Work, Job Instruction Training, Toyota Production System, Toyota Way Values, Culture Development, Visualization (Workplace Management Systems), Continuous Improvement (Kaizen), Meeting Facilitation/Teamwork, and Manufacturing Simulations.

Tracey also was the 2010 recipient of the Business901 Podcast of the Year! The podcast discussed A3 problem Solving.

Tracey likes to discuss the culture before jumping into problem solving but she takes a look at culture from a different perspective than others. It just about comes across as an attitude (in a very polite way) and there is type of swagger about the whole thing. Why not? When you become #1 in the world such as Toyota did and you are #1 methodology in the world which Lean probably is, why not have that swagger to your discussion? It is not pompous, it is an attitude that what you are doing works! She doesn’t write enough in my opinion because of her commitments as a trainer but her blog is one you should follow, you do not want to miss a word she says. You can also find her answering questions on the Lean Enterprise’s A3 Dojo Website.

What does the word "Lean" mean to you or your Company?

As I travel around the U.S. working with various companies that make a variety of different products, I realize a common denominator throughout them. How do they define the word "lean", as well as the word "culture"? What I have realized is very interesting!

When I first started consulting I felt it was all about the "tools", and that’s what companies seem to want, so of course, that’s what they got. As I have matured as an instructor/consultant I, like many, I have led and learned at the same time. In my experience at Toyota, especially back when we were led by the Japanese and their questioning approach; we all as new leaders were being led but at the same time leading others, so it was bringing about the "respect for people" and developing the workforce as a team. I can’t ever recall in my time at Toyota (Toyota Motor Manufacturing KY – TMMK 1988-1998), that we ever labeled what we were doing in a specific word like "Lean", nor did we really think about our daily actions as a "culture". It was just in the atmosphere. It wasn’t until I left Toyota to teach others, that those words started to surface. Somehow we felt the need to give it a name, and as I’ve experience the last 13 years as a consultant, I feel that can have somewhat of a hindering effect…..

Pathway to creating a "Lean Culture"

As I travel around to various clients they are always asking me, "How do you implement or create a culture like Toyota has"? I tell them that’s a very loaded question :). There are so many aspects of creating that culture it’s hard to give a short answer or even "wave a magic wand" to say… "Here is what you should do!!". I wish I was that good . How I see it, you really need to differentiate the People side of Lean versus the Tool side. The People side will always be the most difficult aspect of the discipline needed to create this thing called Culture. The tools are just what they are, mostly countermeasures to change some discrepancy in our process. For the tools to be successful, People must understand their involvement or the purpose behind the tools. As I have stated in previous blog posts you must explain from the company perspective the WHAT, HOW and the WHY of any change or expectation within a persons work….

Tracey’s website: http://teachingleaninc.com and email: tracey@teachingleaninc.com

Using A3 to introduce Lean – Dr. Balle Video

admin — Thu, 19 May 2011 02:22:00 +0000

Lean technology has now evolved from the manufacturing floor to the whole enterprise. Many companies have found real value in applying the fundamental concepts of Lean throughout the organization. The lean concepts of Kaizen, PDCA and the tools such as Pareto Charts, 5 Why’s and even Poka Yoke are commonplace.

As a result of discussing a Lean Enterprise with Dr. Michael Balle, I asked him about his thoughts on Introducing PDCA or A3 to services is it feasible?

Dr. Michael Ballé is a business researcher and consultant and has studied lean transformation for the past 15 years. He is Associate Researcher at Télécom Paris Tech and the co-founder of the French Lean Institute (www.institut-lean-france.fr) and the Project Lean Enterprise (www.lean.enst.fr). He coaches CEOs and senior executives in using lean to radically improve their businesses’ performances and establish lean cultures.

Dr. Balle is also a Shingo Prize winner as an author of the The Gold Mine and The Lean Manager. His newest Shingo Prize was on the adaption of The Gold Mine: A Novel of Lean Turnaround to an audiobook that features performances by multiple readers who bring its realistic business story and characters to life.

Learn the One Page Project Manager

admin — Sat, 26 Mar 2011 04:05:00 +0000

I have been a big fan of the The One-Page Project Manager for many years. In fact, the author Clark Campbell reminded me in a recent phone call that I was the first one to write a review on the first book. Since then, he has added two more books to the collection:

I have not read the OPPM for IT but of course have the first one and the latter which is the OPPM for use with an A3. If you are familiar with an A3, I would recommend the original OPPM as you will find the A3 material rather basic. If you are not familiar with A3 the description of the process is quite good in the book but it does not go into the tools used to construct the A3 in much depth.

The One Page Project Manager is not meant to replace a full blown project management system. It helps you identify and communicate the essential details of a project. I recommended the book in my book, Marketing with A3 (Marketing with A3(Kindle Version)) as an effective reporting tool. Utilizing Lean methodologies, I always felt that in the project management area Lean never had a defined method such as the “C” in Six Sigma DMAIC. I think the OPPM completes the job and is a great companion to Lean and especially A3s. I utilize the OPPM with A3s slightly different than the book describes. I use the entire back side of the A3 for the OPPM. I take advantage of a little artistic interpretation of what constitutes one page.

Though I have not read the OPPM for IT, I would assume from reading the Table of Contents it does not address agile practices. However, since it is basically a communication and reporting tool, it may be an ideal bridge between agile teams and management. Most managers are familiar with the Gantt style and no so much with burn charts. Using the OPPM to report progress may be an ideal crossover.

I have certainly stretched the use of OPPM and managed some rather in-depth and lengthy projects with it. In fact one such project I actually reconfigured the Excel sheet to hold over 100 tasks. It is a tool that should be in anyone’s toolbox. Below is a rather detailed view of the OPPM.

Using The One Page Project Manager

P.S. Clark Campbell is putting on a half-day OPPM workshop at the 2011 Shingo Conference.

Lean Problem Solving approach

admin — Sat, 12 Mar 2011 03:30:00 +0000

Practical problem solving is at the heart of the Toyota Production System and a Lean culture. These skills are based on the PDCA (Plan-Do-Check-Act) cycle and are the bases of the A3 problem solving process. Why is learning the foundation of problem solving so important? When you start looking through the lens of Why? Why is this happening? Why is it this way? You start building a learning organization, a problem solving culture that will grow every minute of the day. The very best competitive advantage that you can instill within your organization.

Ron Pereira at the Gemba Academy introduces the 8 step Practical Problem Solving methodology in this video and touches on a few others. The steps are:

Clarify the problem
Breakdown the problem
Set a target
Analyze the root cause
Develop countermeasures
See countermeasures through
Evaluate both results and process
Standardize successful processes