Feb
26
I just wanted to take a moment to update you on what we are seeing and doing in this tough economy.
1) We have worked with several folks over the past year just looking for where we could cut costs without sacrificing anything with respect to customers. To that end, I’ve found that the cost of registrations (ISO Quality and Environmental, plus the emerging certifications for carbon credits) vary more than you would suspect. We’ve found up to 20% savings by shopping the registrar. I know some feel strongly about which registrar they use, but at the end of the day the piece of paper hanging on the wall says the same thing. How many of you believe you are a better company because of your continued use of a specific registrar? This is not anything I am doing business on, but if you are interested, tell me who you are using and I’ll tell you if there is an opportunity and make an introduction for you
2) This is not the time to invest in training the masses in programs that promise a nebulous payout in the future. The next quarter is uncertain and you have processes that are not working right because volumes have diminished, people have been moved around, suppliers are struggling, customers are not paying on time, … You need improvement on some critical process now. To that end, we have done more business in the past year fixing specific problems for customers. Some quick examples of what we’ve worked on – field reliability of a critical valve in a heavy duty truck application, financial and physical forecasting for a Fortune 50’s Latin American operations, inventory and customer delivery from a Chinese supply chain, seamless tubing yield issues throughout an automotive supply chain. The annual value of fixing these issues has ranged from about $75K for the valve to >$2 billion for the Latin American operation. Cost has never been more than one-forth of the annual value of the problem and in most cases was less than 5%.
3) We have been working a new model with some old friends from Motorola. I believe it is the natural evolution from Lean and Six Sigma implementations that were heavy on training and heavy on the use of your internal resources. We have been going into companies that are successful, but struggling. Most are in high growth industries and have recently acquired, then integrated two or more companies. They have poorly documented processes, too many SKU’s, bad delivery, and are losing customer business and confidence. We go in with a small team of people and completely analyze the existing situation and formulate and execute a plan to correct it for the customer. We still need resources from the customer, but is on the order of one-twentieth what we asked for in the old model. It is tedious work, but we have focused resources not taking away from the customers focus on the day to day, and everyone participating has ten years or more experience in improving these type problems.
I just wanted you to think about these. I believe 1) just makes sense. 2) and 3) make good sense in this economy – engage outsiders on very specific tasks instead of the shotgun efforts like we’ve done in the past.
Regards,
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