Monthly Archives: December 2016

Manage Change on the Shop Floor with Manufacturing Software

By Kristin McLane, President of CIMx Software

With any software system, there’s a balancing act between flexibility and standardization.  Where flexible solutions give you agility, standardization is sustainably repeatable.  You need both in a system for your shop floor.

Manufacturing utilizes negotiable and non-negotiable rules to manage work and deliver repeatable processes.  Enterprise software solutions need to support these processes and change the “negotiable” rules where it is necessary.

A recent visit to a small airport showed the importance of accommodating change.

When Processes Get In the Way of Success

You see, I travel a lot.  It’s standard practice for airlines to reward frequent travelers with perks like early boarding or a special boarding area.

This trip, I was at an airport too small for a special area. So, at 7 in the morning with a crowd of tired and frustrated travelers seething because the plane was hours late, the oblivious gate agent rolled out this threadbare red carpet to welcome the frequent travelers.

“Please step off the mat,” she told a few weary travelers that were anxious to board.  The comment didn’t go over well as the one or two frequent travelers in the crowd hurried onto the plane and the rest were instructed to step back a few feet so she could roll up the carpet.

People argued.  I could understand.  It was early, and many passengers had been waiting for more than an hour. “It’s not me,” she said. “It’s the airline policy.”  The gate agent proceeded to calmly roll up the carpet, carefully put it away, and then settle back to her place at the gate.

Manufacturing Software and Production Agility

I’ve run this chain of events through my mind. I can relate to the need for processes and consistency. For manufacturers and others, repeatable processes are a sure sign of success… unless they aren’t.

Consider what “process and consistency” cost the company in this situation.

Did the benefit to the few customers that qualified warrant what looked like an entitlement for the rest?  Was it worth forcing angry and exhausted customers to continue standing on sore feet while you rolled up a stupid carpet no one in their right mind really cared about? Add to that price the loss of goodwill you would have gained if you just let the passengers on the plane.

Consistency and repeatable processes are critical for modern manufacturing, but flexibility and the ability to adjust to market conditions is a growing priority. Manufacturing software should manage change as well as consistent processes.

Systems that can’t manage change are going to limit a company, rather than increasing efficiency or competitive advantage.

Evaluating Current Manufacturing Software

3d render of time concept roadsign board isolated on white background

Manufacturing is changing. Are you ready? Illustration by http://www.colourbox.com

There are two types of systems on the market – forms-based and workflow-based systems, and each manage change on the shop floor very differently.

A forms-based system uses forms, or fields for data, in the software. Users input data in one field, tagging the information, and retrieve it in another.  It’s easy to use and operate, but limiting when it comes to managing change.  If you don’t have the right form or fields, the shop floor will struggle to accommodate changes to processes.

Workflow-based systems are more effective at managing change.  A workflow system is designed to support a series of work activities that lead to completion. A change in processes or work requires only a simple change or addition to the workflow being supported by the software.

Reports are run on data collected by the system or the users, making it easy to run the reports required by the customer. You’re not bound by what data you can retrieve from the forms in the software.

With workflow-based software users can adjust their processes to accommodate change and still use the software as intended, rather than trying to cobble together a solution outside the scope of the system they purchased.

In the case of the clueless gate agent… the shop floor manager could see how current processes weren’t supporting conditions on the shop floor, and could adjust the workflow as needed, without having to contact the supplier for a new form.

There would be no need to piss off the customers so you could roll out a carpet.  Everyone leaves happy.

Want to learn more, or see how a workflow-based system works? Contact CIMx today for a free demonstration of our software.

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Overcoming Failure: Simple Steps to Improve Manufacturing Software

By Kristin McLane, President of CIMx Software

Not long ago, I wrote about a concept known as “sunk cost.”  The Sunk Cost Fallacy is a cognitive bias that compels us to cling to an investment even after there is little to no chance of a beneficial return. We feel an unnecessary commitment to decisions of the past, even where we’ve lost our initial investment, and so we keep pouring more resources into it.  For example, continuing to invest in a failed business or clinging to a relationship even after its gone bad.

I’ve heard Annie Duke, a World champion poker player, discuss the Sunk Cost Fallacy, and I’m fascinated by her lessons on sunk cost, loss aversion and Decision Science. She recently wrote a blog about supermarket lines and sunk cost.  There are valuable lessons for manufacturers in her blog when you consider the amount of money you spend on infrastructure.

Sunk Costs on the Shop Floor

3d small people - way choice

Don’t let sunk costs sink your productivity and shop floor software? Illustration by http://www.colourbox.com

As Annie Duke explains in the blog, “Our problem is that we don’t recognize that we have later chances to make a new and better decision… Instead, we either think we are done deciding and ignore new information, or think the new decision should give weight to irrelevant factors.”

Much the same could be said of manufacturing. You have to invest to stay in business. Sometimes that investment is in software. Many companies, if not most, are loathe to spend money on these systems as the software or the people who sell it don’t seem honest or can’t be bothered to understand your problems; they’ll sell you whatever they can whether it works or not.

(CIMx tries to eliminate these problems through our sales cycle, but that’s not the focus of today’s blog.)

Once you pay for software, it becomes a sunk cost. You can’t consider the initial investment in the next decision you make. So, what do you do when the software isn’t giving you the return you need? What do you do when the system isn’t working like it should, or the supplier tells you the project is running late and significantly over-budget?  At that point, you need to consider your Return on Failure.

Maximizing Your Return on Failure

We have a history of working with companies that need to improve manufacturing software.  Companies come to us almost monthly with failed software implementations; some of these companies need help, others need an all-out system rescue.  We’ve helped with a total system replacement, ensured the data they needed was in the system, or just consulted and supplied services and software to help the manufacturer get back on their feet.  You’d be amazed at how many software providers desert their customers before the system they installed was fully usable.

In an article from the Harvard Business Review, authors Julian Birkinshaw and Martine Haas describe the theory of Return on Failure and how the most successful companies in the world use failure to grow rapidly and sustainably.  Return on Failure is measured by the information you obtain through the failure (call this “lessons learned”) and the amount initially invested.  No matter the investment, if you can maximize the information learned, you come out ahead.

To apply this in manufacturing, once you’ve selected and started to implement a system, all is not lost if you find it does not meet your needs.  Learn where the holes are.  Create a list of what’s still needed.  Rapidly identify what’s broken.  Then, and most importantly, apply the concept of sunk cost.

man under money on white background. Isolated 3D image

How much is inefficient software costing you? Illustration by http://www.colourbox.com

The amount you’ve already invested in a system is irrelevant to the problem you’re trying to solve – a software system that’s currently not doing what you need it to do.  Unless the provider of the failed system can bail you out for the best price with the best result, why should you continue investing in failure?  The money you’ve spent shouldn’t factor into your next decision.  Are you worried about introducing another vendor and creating a bigger failure?  If you do nothing, then you’re accepting a shop floor digital infrastructure that will always be less than optimal. You’re basically crippling the profit driver of your company.

I would suggest it is MOST dangerous to continue investing with a supplier who has failed.  I’d also suggest a consultant can help identify the problems, but they can’t sustainably deliver an ROI for the future.  That’s not the strength of a consultant. You need a solution to the problem.

Increasing your Return on Failure involves learning from failure and creating a strategy for improving results in the future, and that’s where CIMx can help.

We’ve done it before.  Numerous times.  Our procedures are built to rapidly identify the gaps in your processes and determine the optimal strategy and solution.  With a full staff of engineers, shop floor analysis tools and products that can rapidly and robustly help you move data, we work with you to determine and implement a solution to get you up and running as quickly as possible.

Customers come to us not only with software implementations that failed, but also aging systems that are now failing or crippled by obsolete infrastructures.  We’ve even worked with customers (multiple ones if you can believe it) buying parts for aging servers off e-Bay.  Continuing to invest in systems like these represent sunk cost bias.  Continuing to pour money and resources into a failing system is not only foolish, but it’s holding your business back from optimizing production and profit.

Lessons Learned from Failure.

Each time we work with a manufacturer confronted with a failed (or failing) software system, we do our own lessons learned.  Here are a few areas that we can help, addressing each area Birkinshaw and Haas refer to:

Costly customers cost you dearly

If you are losing money regularly, you may not know your production costs.  Add manufacturing variability to that (customers changing one or more parameters on standard product), and the production estimate guessing game gets ever more dire.  With a solid system in place you can confidently estimate your production costs, and then run comparisons to determine the actual costs.  Track it daily, weekly, monthly or yearly.  You’re in control of the data.

Lack of market knowledge steals profitability

Do you know what’s really going on in your industry?  Plug competitive data into your analytics engine and see how your operation stacks up.  What if you were able to save 5% on the time it takes to complete a single shop floor operation?  Would that be the difference between a productive, profitable project and one that costs you and your customer time, money and aggravation?  The benefits you accumulate with a successful software system can be the difference between success and failure.

Alignment with the corporate strategy increases customer success

If your company were to make a broad change in how they manufacture for customers, could you identify how it would affect your ability to deliver for independent accounts?  Manufacturing software can provide a view, part by part, of how change impacts you and your customers.  If you were able to implement that change without increasing costs across your customer base, wouldn’t that increase your ability to compete?

Supporting a strong culture keeps you fully staffed

Failing systems have a negative impact on your team as well.  In a world where it is increasingly difficult to acquire and keep great employees, you need to do everything possible to help your shop floor staff to do their work.  Make their job easier by getting them the information they need.  Give them a system that empowers employees, providing access and feedback to both engineering and sales, increasing collaboration across the company.  We can provide you tools to do this.

Looking to the future provides continued improvement

Once you’ve got the right system in place, don’t stop there.  You need to continue to improve to remain competitive.  Business and manufacturing analytics provides a view into future trends.  We use trailing twelve charts to help us see forward trends.  Use this information to overcome production issues and make better decisions.

Next Steps to Increase Your Return

We’re proud of our expertise in overcoming failure for manufacturers, and want to continue helping companies in need of a technical lifeline, which is why we’re introducing a new program – the software trade-in.  We can’t take your current software licenses (and quite frankly, we don’t want them) but we’ll empower you to exchange them, license for license, with a CIMx Software system that will work for you.  We’re experts at rapid installation with a focus on strong investment returns, and our expertise will ensure you quickly replace failing systems with software that empowers production and manufacturing.

If you don’t want a heavy sales pitch, contact me directly to hear more about this, or talk to any member of my team.  We’ve made a business out of helping manufacturers improve production, and we’re ready to share our expertise.

Talk to you soon.