Many of life’s failures are people who did not realize how close they were to success when they gave up.
- Thomas Edison
Ok, let’s first address the 800-pound gorilla in the room, the word FAIL. Some people are actually afraid of the word fail… But I contend – You haven’t failed if you learned something.
What is Fail-Fast-Fail-Cheap (FFFC)?
Stop spending time and money on developing new processes, products, or marketing messages without trying (at least) pieces of it out.
TMAC, the U.S. Department of Commerce Manufacturing Extension Partnership affiliate for Texas worked with a company that wasn’t getting all they needed from their vacuum system, it was not removing debris from the material they were cutting. They were ready to spend thousands to tens-of-thousands of dollars for a new solution. After listening to their concerns and watching the process, we came up with, admittedly what seemed like a dumb idea, which was simply make the vacuum pull over a smaller area.
Back at TMAC HQ we cobbled together a crude prototype and tested it with a milling machine and sample material. It seemed to work, so it was time to try it on the real machine.
Can you imagine walking into a company with a 2-liter bottle and a roll of duct-tape? As you can imagine they laughed – mercilessly. However, after a quick test our concept proved to be a rousing success. So much so that the customer didn’t want us to take back our prototype – it worked so much better than what they already had in place. For a minimal investment of time and money, we were able to test the concept – fast and cheap. If it didn’t work, back to the drawing board and no one was out much. This time it DID work, so the company moved forward with the adjustment without purchasing an entirely new system. This example of cost avoidance directly benefits your bottom line!
Function, not form, is key when proving out a concept.
On a side note, it is very important to ensure that sufficient resources, in terms of time, money or both, are spent to truly test out a concept. Many (including us) have encountered instances where there wasn’t enough time spent to test a concept, and when it failed, it was not clear whether it was the concept or the implementation.
Bottom line: The key to Fail Fast Fail Cheap is to spend minimum resources to get the concept off the paper and into the application so you can tell if it needs to be revised, killed, or finalized.
Do you have a proven system for testing your new ideas?
So, you have a new product idea that will revolutionize the world, now what?
I have been there many times myself, “Man, I wish there was something that does this…”. Many believe that the next steps are prototyping, manufacturing, and ultimately a house in the Bahamas. The problem is, just having an idea does not make it commercially successful, nor does it warrant the expense in time and money to bring the idea to the market. I remember when I was 12 years old thinking how cool it would be if there was an interactive map in the car. Fast forward many years, now you have GPS in cars, heck, even cell phones. Really, the first step starts with pencil and paper.
Before you go too far, there are five simple questions to answer: If the answer to the last question is money, then stop here, as the money is at the end of a long painful road. Answering these question will help to communicate the idea to others, as well as potential partners, investors, etc.
PROBLEM: What caused you to have the idea?
My reasoning for the interactive map is that we used to drive from Michigan to Wisconsin once a year to visit my dad’s family. He wouldn’t let anyone else drive; he wouldn’t tell anyone else the route, because we would get lost. We came close to hitting a few ditches along the way, since he wouldn’t sleep, and we would make the trip at night after a long day of work.
PROMISE: What is it that your solution will do? You do not have to have the technical schematics all figured out, but at a high level, how would this work, ‘A widget would cause X to do Y’ is fine, as long as you know what Y, and it is going to take something that does X to do it.
I had no idea how to track the car, or how to take the data and figure out how to map it, but hey – satellites sounded cool! So, if a satellite could track the car, at least that part is sorted out. And, well, if the car knew where we were going, and how to get there, it would cut down on the getting lost part, right?
CUSTOMER: Who are people having the same problem? Many people just assume that the customer will be a percentage of the population. This is not correct, because out of those, you have the ones that just live with the problem, have their own way to deal with it, don’t care, and / or have never experienced the issue. Essentially, think of your demographic, and rewrite the problem statement and promise in a way that would get you excited. Don’t worry about the number of people at this point because if you can get them excited, they will come.
In my example, I figured there was probably a lot of families with someone who did not want to stop for directions, nor let someone else drive because they ‘knew the way’. Notice, the problem and promise are written so that someone growing up in the US and went on family road trips can relate.
PROOF: Why will your solution work / why should I believe you? This you can essentially make up, but use yourself, family and friends as a sounding board: what would make you and others believe it works? Maybe there is a test, testimonial, standard, etc. that can be used to give the idea credibility.
In my example, many movies show the military tracking the bad guy, so I figured a cool testimonial would be the FBI’s most wanted tracked down by the use of this device. If the FBI trusts it, shouldn’t you? Tests could be done where someone is given a challenge, drive from point A to point B without a map, only using this device, and vice-versa: who gets there first, less frazzled, etc. The classic example of this is the blind taste tests ran by Coke and Pepsi, 4 out of 5 prefer X.
WHY DO YOU LOVE THE IDEA: Why do you want to see this in the market? If money is the only reason, you might as well stop, because that will not happen for a while. I was once told by some doctors that part of the residency program is to weed out those there for a paycheck versus those there for the patients. Those for the paycheck will not stay around because of the long hours and little pay. There will be long, thankless hours involved with taking a product from idea to commercialization.
In my example, I would have loved to have this so that my mother could drive for part of the trip, so that those not driving could rest, as well as know where the heck we were at 2 am. Those trips were long because it was hard to sleep when the car would make sudden jerks when my dad woke back up. However, this love was not strong enough for me to do all the leg work to fully develop the idea. Trust me, I kick myself every day, but it goes to show the point, you really have to want to see your idea commercialized, otherwise, it will be the anecdote to a blog post.
I wish I could take credit for the above, but I cannot. The above is a small portion of what is called a Jump Start (shameless plug: offered by TMAC) developed by Doug Hall at Eureka Ranch. This is a one day idea generation, filtration, and communication workshop, followed by 30 days of follow-on coaching. The goal of a Jump Start is to determine significant hurdles that would keep an idea from being viable, or conversely prove the idea is worth pursuing, with facts, not just gut instincts. This process works best for companies that want to bring something meaningfully unique to the market, which customers are willing to pay for. I am not talking a tweak, or a me-too, but something totally new for your company and / or market.
So, when is the last time you introduced a new product to the market? When you did it, did you look at the above questions? Tell us about your new product / service experience.
After listening to the webinar Leading Strategies for Manufacturers Against Low-Cost Competitors, presented by Mark Hehl of Hehl & Associates, through IndustryWeek, I found it validating that many of the concepts that we, at TMAC, discuss with our customers were some of the best ways to compete.
Is Manufacturing in China Really a Better Deal?
While the talk focused on China, which is by far not the only low-cost manufacturing country, many of the findings are common regardless of the country. Companies are lured by the low-cost promised on their purchase order, but neglect to consider unexpected costs associated with doing business outside of the US.
With China specifically, there is a steady increase in labor rates as workers demand more money and become more skilled. Ironically, while China has a large population, the one-child rule has limited the available work force, again leading to increases in wages. As current workers become better trained, there is a problem with retention of workers, requiring factories to compete for the highly skilled. The bottom line is increased labor rates are only a small part of the story, fluctuating exchange rates and inflation, are usually ignored when deciding to use off-shore suppliers.
Going the Distance
Off-shore suppliers have other associated supply-issue costs like on-time delivery, quality expectations, communication barriers, and cultural issues. Time and time again, I’ve heard horror stories of a delivery being late. Instead of using (the planned) surface means of shipping, air transportation is all of the sudden needed, adding a cost of up to 8 times more than originally budgeted. In the beginning of the relationship, the quality of the parts is adequate, but as time goes on, the quality starts to degrade. With communications, especially if there are significant distances between the supplier and the company (say Texas to China) if something is wrong, it may take a day or two to communicate the issue, let alone resolve it. Some cultures do not discuss problems at the time corrective action could (and should) be taken. These additional, usually unforeseen, costs are driving companies to bring their manufacturing facilities back to North America – so the logical question is How do we keep them from leaving in the first place?
Keeping Manufacturing Stateside
Implement Lean Methodologies. Lean isn’t exclusive to the plant floor; it can be implemented in administrative processes too! Lean focuses on cost containment, reduction and/or elimination of waste, and increasing capacity without increasing personnel or equipment. A poor Lean implementation can cause more problems than it solves. Lean is a journey, not a destination. Industryweek’s recommendation was to hire an external organization to aid in your Lean deployment.
Competitor and/or Market Intelligence. Look into what your customers want: What is important to them? Talk to customers who purchase from competitors and see what they like and dislike. Look for weaknesses, and exploit them.
Innovate. Quite simply look at new products for existing markets, new markets for existing products, and new services that you can offer customers. Companies that innovate earn double the profit of companies that do not. When was the last time you introduced a new product?
Offer Superior Customer Service. Determine what your customer really wants. How? Ask. Using Lean in the administrative side of the business, your customer service representatives can be more flexible and often respond faster, something that it is difficult for off-shore competitors to do.
What Does it All Mean?
The entire webinar can be summed up:
If you implement Lean, you can use the savings to innovate, offer superior customer service and competitor intelligence.
The presentation was interesting and informative; I recommend it as valuable food for thought for any manufacturer or business owner.
Are you considering moving your manufacturing operations overseas? Have you moved your manufacturing operations back from overseas? Why? Have you implemented any of the suggestions above? What was your experience?