The Data Heads

Over the last few days we’ve posted information about an upcoming User Conference on our Events page and our Press Release pages.  Because this is a joint Hertzler User Group and Minitab User Group, I wondered briefly if we should call it a MUG HUG.  Too cheesy. (Detailed information and Registration here.)

Here is some more background.

I’m really looking forward to the conference for several reasons.

First, I’m pleased that two old friends will be giving presentations. Wayne Tollefsen (Omron Automotive) and Jamie Dobravec (Grayhill Inc.) have both been customers for years, and they always have interesting, real-world perspectives. I always learn something when I talk to them. This is the first time (I think) that I’ve heard either of them give formal talks.  They’re definitely worth hearing.

Second, I’m looking forward to sharing something about the learning path that I’ve been on in the last eight or ten months on Appreciative Inquiry. Appreciative Inquiry (Ai) is an exciting organizational change model that is based on the idea that organizations move in the direction of the questions that they ask. It is rich in philosophy and research, and has a well-developed methodology for application. In addition to describing my personal journey in Ai, I’m eager to explore the possibilities of learning together about the best practices for aligning strategy, culture, and tools to achieve optimal results.

Third, we spent the last year hard at work on the GainSeeker Suite Version 8.  We released Version 8 a couple months ago, and my business partner and Hertzler’s Alpha Geek, Byron Shetler, is going to share his perspectives on the new release.  If you’ve heard Byron speak before, you know you’re in for a treat. His insights and ability to bridge technology and the way people work are unique, and for a guy who claims to be uncomfortable up in front of an audience, he is a great communicator.

Finally, I’m looking forward to learning more about what our customers want from the integration between GainSeeker and Minitab. We formed a loose alliance with Minitab over 10 years ago because we didn’t want to get into the advanced statistics side of things, and Minitab is the most important app in that arena. We see the combination of GainSeeker and Minitab as far “more than the sum of parts.” Jay Bronec, whose company, QualiFine, is hosting this users conference, has been a strong voice for that synergy. Here is how Jay describes it:

“Back in 2000 I sponsored a conference highlighting the integration of GainSeeker Real-Time SPC with Minitab.  At the time it was clear to me that integrating these two systems increased the value of both tremendously.  A decade later this innovative approach still ranks at the top of my list of best-kept secrets to thriving in manufacturing. To get full value out of Minitab, a manufacturer needs to implement a real-time data automation solution like GainSeeker. I tell my customers to think of it like this, ‘If your best talent is too busy collecting, scrubbing and creating pivot tables to extract basic reports from Minitab, there’s little to no time left for making sense of the data. You’re reacting, not leading. In the current business environment, real-time data are essential for success.’”

Putting Jay, customers of both Minitab and GainSeeker, as well as people from Minitab and Hertzler Systems in the same room on the same day is a great opportunity to learn. I can’t predict what will come out of it, but it will be good.

Those are my top reasons for attending. What about you? Are you coming? What do you hope to gain? Use the ShareThis button below to mark this page, leave a comment, tweet me, schedule a conversation, or call 800-958-2709.

Yesterday my colleague Chris called me. “I just had a really interesting call from Bob,” he said. (Bob isn’t his real name. “Bob” is a customer who doesn’t want me to divulge his or his company’s name.) Bob’s company makes  packages filled with something that you can find in most grocery stores. They make a lot of these packages.

In one of my last conversations with Bob he told me “I’m almost embarrassed to tell you how much money GainSeeker is saving us by helping us reduce over pack (give away). The ROI on our deployment is shocking.”

We love it when we hear these stories – even if Bob won’t let me do a full-blown write up with all the gory details.

But Bob’s call to Chris raised an interesting question. Chris told me that Bob said he now believes they’ve been under-reporting the payback on his GainSeeker deployment. After six months or eight months of reducing over pack, Bob is discovering that his plant has made significant increases in yield.

He had been counting the savings realized by not giving away the product, but he wasn’t thinking about where the product he had been giving away was going.

It seems to me that the answer to this question hinges on whether the major constraint to his system is plant capacity, or demand for the product. If demand for the product is unlimited (we could sell every package we make) then any reduction in over pack goes into new packages and brand new sales. That is like picking up free money off the floor.

On the other hand, if the constraint on the system is capacity for production, then any reduction in over pack reduces the total cost of filling the package. If you have an order for 1000 packages and you can produce them in 7 hours instead of 8 hours, then you save one hour’s cost (energy, labor, etc.) and use less materials.

This reminds me of a chapter out of Goldratt’s The Goal. Do you remember when Jonah walks through the plant with the hero Alex and his team and discusses bottlenecks? They get to the heat treat area and the consensus among the team is that the parts waiting in the queue (WIP) are worth only a few thousand dollars. Jonah helps them realize that in reality those parts represent over a million dollars of revenue stuck in WIP. (p155-156)

I think Bob’s controller will have to weigh in on the final answer. What is clear to me is that Bob was delighted with GainSeeker Suite’s power to collect and analyze data so he could reduce material  costs and increase yields.

After I wrote most of this I had a chance to talk directly with Bob, and I learned a little more. He produces to order, not to stock, so improving yield does not lead directly to new sales. Improving yield means that he can produce the same output at lower costs. If the cost of over pack already includes all his overhead costs (energy, labor, materials) then I think it would be double-dipping to count increased sales. However, at some point it does seem that increased capacity would result in increased sales. He told me that last year he had the place open half the Saturdays of the year to meet demand. Now they’ve eliminated overtime and increased volume. Can he get his accounting people to recognize this? We’ll see.

What do you think? How are you tracking the ROI on your data efforts? How might GainSeeker help you? Use the ShareThis button below to mark this page, leave a comment, tweet me, schedule a conversation, or call 800-958-2709.

Recently I ran across the latest report by the National Association of Manufacturers (NAM) on the state of manufacturing in the United States. You can get your own copy of Manufacturing Resurgence – A Must for U.S. Prosperity.

Not surprisingly (given that funding for the report came from a manufacturing lobbying organization) the report finds that manufacturing fuels economic prosperity, that manufacturing in the U.S. is struggling in recession, and that the industry needs pro-growth policies to create jobs and remain competitive globally.

The report points out that the large trade deficit in manufactured goods and services exports are inadequate to pay for all U.S. imports. Supported with a dizzying recitation of statistics, the report details how U.S. indebtedness to foreign countries, particularly China, continues to rise.

The authors draw some comfort from the recent resurgence in exports due to a decline in the U.S. dollar relative to other currencies. “The responsiveness of exports overall to a fall in the value of the dollar is hopeful; it suggests that narrowing the U.S. competitive disadvantage can help restore the health of the industrial sector.”

A couple of specifics in the report caught my eye.

In the discussion on R&D investment, did you know that 19% of all R&D came from firms with 5 to 499 employees? Or that 85% of this was self-funded? This is an impressive statistic. “Small firm patents tend to outperform large firm patents using measures such as close link to research, originality and generality.”

The report also addresses energy use and global climate change. It calls for quick decisions about national policies on carbon emissions, arguing that a state-by-state patch-work of regulations makes compliance much more difficult. It also points out that “Using energy more efficiently will require innovation within the manufacturing process itself, but will also provide a market for manufactured products that will help reduce energy use for others.”

The report concludes with about a dozen policy recommendations that would support a resurgence in manufacturing in this country. Here are the highlights:

• Reduce the burden on corporate income derived from production and sale of U.S. made products.
• Invest in research and encourage business investment in R&D.
• Make the policy commitments to develop cleaner, more efficient, more sustainable fuel technologies
• Continue to improve our own education quality and accessibility to enhance our home grown pool of science and technology graduates and help in assuring foreign-born graduates that they have opportunities in the U.S. as well.
• Government at all appropriate levels should make infrastructure investment in transportation, communication channels and the energy grid.
• Reconsider the scope and definition of manufacturing used by government statistical agencies.
• Support the health of the manufacturing supply-chain.
• Establish tax (and other) policies that encourage the vibrancy of U.S. small businesses.
• Stabilize the financial markets and work toward developing a fully functioning financial sector.
• Facilitate a more strategic process for legal immigration.
• Follow a system of fairly-conducted trade that supports the expansion of U.S. manufactured exports using the international trading systems rules for governing a level playing field.

I encourage you to take a look at the full report. What do you think – would these programs help your business? Use the ShareThis button below to mark this page, leave a comment, schedule a conversation, or call 800-958-2709.