Archive for February, 2010

Our Annual 5 S Lean Cleanup

February 18, 2010 by Kara

Each year at Setpoint as we begin the New Year we go through the 5 S process in our office.  We sort through everything at our desks, the shop, closets, and in the office in general to clear out those things that we no longer need or use.  Then we straighten everything up and rearrange stuff to clean things out and make it easier to find items that we use. 

This year as I was preparing to lead the 5 S cleanup the decision was made to cleanup our Intranet instead.  We got rid of so much over the last few years and hadn’t really accumulated much since our last cleanup.  However, our Intranet is about 5 or 6 years old and instead of cleaning old files off as they were no longer needed and keeping the architecture up to date as we went along, new links and pages were added instead.

If you ask the CEO to find a document on the Intranet he won’t be able to.  He tells me all the time that it’s confusing and that it takes too many clicks to find anything.  How in the world do you start sorting through the Intranet?  I started by making a list of every page and document that we had on there.  We have over 500 items on our Intranet, I had no idea.  Some of those items were duplicates where the same document was added into two different sections.  At least I knew what I needed to sort through.  It just goes to show that when you don’t pay attention to something, it can get totally out of hand as everyone keeps adding things that are not necessary.

The next thing I did was to ask everyone what documents they actually use from our Intranet.  For the most part, there were four documents that most people use.  The rest are either once in a while or they are not used at all.  That was an eye opener, why do we have so many documents available if no one ever even looks at them. 

Now it is time to straighten everything up.  Those items that are used will need to be grouped with like items so that within three clicks you can find any document on our Intranet.  I also need to come up with better category names so that by looking at it you will know what is included, rather than generic terms like “Forms”.

So I’m off to get these items straightened up.  Hopefully the next stage in this process will be easy.

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Value Curves

February 11, 2010 by Brad

As a pretty consistent reader of Harvard Business Review magazine, I find that there are many articles that are good and occasionally there articles that are very stimulating and worth remembering. Those articles make me think and give me new ideas to consider as we steer our business to be more successful. One of those articles that I read many years ago was, “Value Innovation – The Strategic Logic of High Growth”. It comes from the July/August 2004 issue. It is authored by W.Chan Kim and Renee Mauborgne. I pulled it up again and read it as we are trying to chart some new courses in our business. In addition to that article, they also have written a best selling book named Blue Ocean Strategy, you may have heard of it, it is also worth the read.

In the article they point out that most industries compete around the same points of competition and it becomes a race where everyone makes incremental changes in how they compete, but not very often does anyone truly have a breakthrough in how they approach the marketplace. The basis of the article is that incremental points of competition pushes the products or services towards commodity pricing and fights over small changes in market share, no big gains are possible with this strategy.

If you want to make major changes in your industry you have to think differently. Below is an example of their value curve research.

Value Curve

Every industry completes on certain factors. I’ve labeled this example with 6 factors that are along the X axis., there may be more or less in your industry. If there are too many, I’d suggest you boil them down to the few that really matter. It will be hard to figure out what to do if you have too many. Factors vary by industry, some may be the same and some will be unique to your industry. Examples of factors may be cost, features, size, quality, etc. Spend enough time to make sure you really have what the points of competition are, not what you wish they were.

Along the Y Axis we have a relative scale – from high to low, expensive to cheap, many features to few features, etc. depending on what the factor is, you get the idea.

In this example the existing competition is the blue solid line. Based on the factors you can see that the factors fall in different places to the relative scale. In a typical industry the competition will nudge these factors incrementally up and down the relative scale trying to gain market share, but not changing the Value Curve in any significant way.

In this example, a newcomer arrives with a completely new strategy. This is represented with the pink dashed line. You can see that this strategy completely redefines the blue value curve in which the current players compete. Pink is significantly changing how they are going to compete by significantly changing the relative value of factors 1, 5, and 6. If they are successful they should enjoy success and their research says they will enjoy many years of uncontested competition.

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