The Data Heads

Here is a chance to participate in Hertzler Systems’ development effort.

Sometime in the next few months we’ll be releasing Version 8 of the GainSeeker® Suite. One important capability in this new version is a brand new report writer. I saw a sneak preview of it the other day, and my jaw dropped open several times when I saw what it could do.

Sample Design Screen for GainSeeker Version 8 Report Writer

Our development team is looking for sample reports to test the new report writer with “real data”.

We invite you to submit any sample reports that you have. These might be Certificate of Analysis or other report that you use on a regular basis. You can send in your report whether you’re already a GainSeeker user or not.

Sample Report for GainSeeker Version 8 Report Writer

To submit your sample, send it electronically to [suggest at hertzler dot com], or fax it to 574-533-3885. In either case, make sure you include your contact information so we can respond to you personally.

A couple years ago we sponsored a research report by the Aberdeen Group on best practices in Six Sigma deployments. You can download a copy of the report, and a companion white paper that I wrote for the report called “Leveraging Technology to Transform Culture.” For me the most astonishing thing about that 2006 report was the disconnect between the challenges people say they face in their Six Sigma deployments and their responses to those challenges.

Most of the challenges people face are cultural:

Most people respond to those challenges directly by doing a checklist of initiatives: train employees, introduce change gradually, assign senior management as champions, engage outside consultants, steal talent from the competition, and so forth.

This frontal assault has been going on for years and it isn’t working. That’s the forehead smacking part of this.

Years ago I realized that making data more visible and accessible changed the way people look at themselves, the people around them, and the problems they face. Somehow just making the data visible takes away the personality and political dimensions - the cultural barriers - and helps people focus on solving problems.

Making the data very accessible - visually on the screen in a control chart or a dashboard - and making it available in real-time is a huge benefit. It breaks down all kinds of barriers.

My customer, Royce Binion, then Director of Operations at BAE Systems Controls in Fort Wayne, put it most succinctly when he said to me years ago “Real-time access to accurate, actionable data is the number one tool that has enabled us to move to a data driven culture.” This was way back in 2000 when his plant won the Industry Week’s 10 Best Plants award, and a few years before they would win the Shingo Prize.

This came up again for me this week when I attended a webinar hosted by the Aberdeen Group. They’re doing follow up research to see what has changed in the last 2 1/2 years, and they wanted to share their preliminary findings on best practices in Lean Six Sigma deployments. (If you’d like to participate in the study, you have until April 30. You get a free copy of the report if you do.)

What struck me as I heard this briefing is how little has changed. Cultural challenges are still at the top of the list, followed closely by IT and technology challenges. People still don’t seem to be connecting the dots.

Today I wrote to Cindy Jutras, the author of this research, to get her take on it. She wrote back:

in spite of all the data and IT related challenges from the previous slide (about the challenges people face in Lean Six Sigma deployments), there was not an appropriate response to those challenges. I agree that visibility is key. And our results support that. In general we found those with True Six Sigma have 110% better visibility than Industry Average and 580% better visibility than Laggards. Not surprisingly, they deploy far more IT tools than those not performing as well.

How about you? Are you using real-time access to accurate, actionable data to transform your culture? You can leave a comment, tweet me, schedule a conversation, or call 800-958-2709.

I love this post from Thomas Wailgum at CIO.COM. His title says it all: “Wake Up People! Forget Twitter and iPhone Apps, and Focus on SAP and ERP Apps.”

I’ve been on Twitter now for several months and I confess that I find it addicting. I still can’t decide if it is irrelevant or useful.

Wailgum argues that:

They are nothing more than a costly distraction, stealing your attention from the massive problems that you, your company and the business world now face: We’re in a deep recession (perhaps a depression), and your company’s core IT systems are going to be called on to do more and more (with less and less).

If you’re a Twitter fan, you’re likely to bristle at this argument.

I’ve certainly had fun following people on Twitter, and I’ve even made some connections and learned some things that I wouldn’t otherwise know. But it doesn’t drive my business. In fact, I think Wailgum hit the nail on the head: Business enterprise software will drive value in your business, not Twitter or Facebook.

Recently we sponsored a research study by the Aberdeen Group.  The report looks at specific practices and technologies that manufacturers have in place, and look at the productivity and profitability of those businesses. Here is a key finding from this research that supports Wailgum’s argument:

This is the first benchmark produced by the manufacturing practice (Aberdeen Group Research analysts) showing a direct correlation between Best-in-Class operational performance across On Time Delivery, OEE and Yield metrics that enables significantly higher profitability. In fact, the Best-in-Class enjoy over 33% higher operating margins than both Industry Average and Laggards.

So what is it that Best-in-Class performers do that generates a 33% higher margin than Average or Laggards? What behaviors drive this kind of performance benefit?

A glance at the top four or five high impact differentiators between Average and Best-in-Class performers reveal a common theme: real-time data. Here are the top differentiators of Best-in-Class performance in manufacturing companies:

• Continuous Improvement Teams leverage analytics and real-time visibility into operations
• Production release and control leverages real-time data
• Production optimization uses real-time data from production processes and responds to process deviations
• Plant floor exceptions are monitored in real-time

Twitter isn’t on the list. Neither is Facebook.

Nothing on this list is very sexy or even new. Nothing is based on derivatives. It is all the fundamental block and tackle stuff that actually makes a difference to the bottom line. A 33% difference in the bottom line.

If you want to read more, please download the Event Driven Manufacturing Intelligence Report and my companion white paper, “The Role of Real-Time Data in Improving Profitability and Customer Satisfaction.”

Then tell me whether you think Twitter and Facebook are irrelevant. You can leave a comment, tweet me (ironic isn’t it?), schedule a conversation, or call 800-958-2709.

Now I need to tweet about this new post!

Several years ago I started practicing what I preach, at least when it comes to making better use of data in my business. What did I do that was so radical? I started using control charts to track my key business metrics. Imagine that!

We set up a simple data entry process that my controller uses. It takes him a few seconds once a month to key in a few numbers at month end, and again every other week after cutting payroll and payables. And there is another set of numbers that we automatically extract from our call center system.

My key metrics are around revenue from a couple of sources, expenses in a couple of key, controllable categories, cash, profitability, and the number of open support calls. It isn’t perfect, but it gives me a view into the business that I would not want to live without.

Sample KPI Desktop from GainSeeker Suite

I really like the control chart format. It is such a knowledge-rich way to look at data. I know there are people who claim they can look a column of numbers and understand them. When I do that, my brain goes numb. But I find the graphic representation of data on a run chart very easy to follow. In a glance I can see the history and any statistically significant shifts in the process. I can also group data by time period so it is easy to compare quarter to quarter, or year to year.

I implemented this long before we introduced a dashboard module for the GainSeeker Suite.  I’ll get in trouble for admitting that in spite of all those cool dashboards, I still prefer the control charts.

How do you look at KPIs? What are the KPIs that matter in your job and your business? Comment, tweet me, schedule a conversation, or call us at 800-958-2709.

Recently I met with my friend and board member, Dennis Blyly. While he is quick to point out he is not a macro-economic expert,  Dennis is a very smart guy with his fingers on the pulse of a lot of businesses.  Dennis brings a really useful 50,000 foot view of the economy.

We were discussing the current spate of bad economic news and told me he thinks we are at or near the bottom of the sharp downward trajectory. This isn’t to say that things are about to turn up soon, but at least in the manufacturing sector, it won’t get much worse.

When I asked if he could point to data, he said: “Its mostly anecdotal. I’ve been talking with CFOs in mid to large-sized manufacturing companies. They’re telling me that their shipments have been lagging retail demand for several months. Anxiety about banking relationships has made everyone in the supply chain very focused on managing for cash, and that  means reducing inventory to a bare minimum.  That would suggest that production (at least for consumer goods) could improve without much help from consumer demand in several industries as this process winds down.”

I was both surprised and not surprised by his comments. One the one hand, it seems like bad economic news is drowning out good news at a ratio of 1000:1. Today’s unemployment numbers say my county has the highest rate in the state at 18.3%. My town is actually at 18.9%. Darn near one in five.

On the other, I’m talking to customers and prospects who see this as a time to invest to improve efficiencies, quality and productivity. They are watching cash, but making prudent investments where they can. Some business will not survive this recession. Those who do will be better, more productive companies. They’ll have to be to pick up the slack left by the ones who didn’t make it.

What about your company? Hunkering down? Investing? Panicking? Please comment, tweet me, schedule a conversation, or call us at 800-958-2709.

With all the economic doom and gloom in the main stream media, let’s take time to celebrate Del Monte Foods’ Third Quarter Earnings report, which boasts a 14% profit increase for the third quarter.

In a Del Monte Foods press release, Richard G. Wolford, Chairman and CEO of Del Monte Foods, said the company’s aggressive focus on cost reduction is a key part of their strategy:

“The work we have done, combined with continued marketing and innovation investment and an ongoing, aggressive focus on cost reduction, position Del Monte to deliver our fiscal 2009 goals and drive shareholder value.”

During the Third Quarter conference call, Wolford provided more details: “We are focused very aggressively as a company on cost reduction programs and that’s key for us and we’ve got a good history of that, and we plan to redouble our efforts there and that’s going to be important for us going forward. Our target is 2% to 3% of costs, and we’d rather see a three handle on it, and so would our operating guys.”

This dovetails nicely with this news story describing how Del Monte’s Milk Bone Division used GainSeeker Suite to drive a 3% improvement in performance across all packing lines.

Congratulations to the entire team at Del Monte.

How does this compare with your 3rd Quarter profitability? Please comment, schedule a conversation, or call us at 800-958-2709.