What is Kaikaku?

Kaikaku is one of these Japanese words which found their way into the Lean lingo. Kaikaku is usually translated into “radical change” or breakthrough.

my tiny Japanese dictionary proposes “reform”, “renovation” and “reorganization”.

“Doing” kaikaku means introducing a major change in a process in order to drastically improve it (quantum leap). Kaikaku is therefore “opposed” to Kaizen, which is incremental, small steps, improvement.

Kaizen is often praised for being a safe and low-cost improvement way. By changing only one thing at a time and trying allows to observe the effect of the change and to learn from this experience.

Kaikaku will discard much if not all from the existing solution and introduce big change(s). The usual set of parameters and previous accumulated learning may not be useful anymore. The new process is likely to be unstable until all new influencing parameters are fully understood and under control. Therefore Kaikaku is feared as risky.

Yet Kaikaku is not all bad. Once Kaizen has given all that can be reasonably achieved (timely and in terms of Return Of Investment), a radical change may be the only option to improve further.

Kaikaku is often understood as innovation, bringing in some high-tech or top-notch technology.

Indeed, if a manufacturer changes his production way from cutting away material to additive manufacturing (3D printing to make it simple), it is a disruption and potentially a quantum leap in productivity, efficiency, lead time, customizing, etc.

Kaikaku can be more mundane than that, like reorganising the way of operating for instance.

I remember working for Yamaha music, assembling home cinema receivers and CD players, when we heard the headquarter was planning a switch from long linear conveyor belt assembly lines into small autonomous cells, it was kaikaku because it was disrupting decades of streamlined production.

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Chris Hohmann in Yamaha’s headquarter, Hamamatsu city

Many Kaizen events (also called kaizen blitz) are in fact small kaikakus where drastic changes are made in short time. Those events are not the best way for try-and-learn, it’s more often one expert moderating a workgroup and leading it to a disruptive solution, hence kaikaku.

If you’d like to share your thoughts or experience, use the comments below.


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Re-SWOT your business with 3D printing in mind – Opportunities

In a prior post of this series, I explained why it is wise to (re)SWOT your business with 3D printing* in mind and in another one I suggested assessing the potential Threats your organization could be facing. In this post, it’s about Opportunities offered by the new manufacturing ways.

*I use “3D printing” and “additive manufacturing” interchangeably

Reminder: with the recent progresses in 3D printing (and 3D scanning) with regards to materials that can be 3D printed, every business is potentially at risk to discover a 3D printed substitute offered by an unsuspected and probably unknown competitor.

Yet what is a threat to some is an opportunity to others. The ability to offer a faster, cheaper, highly customized or whatever new product or alternative offer incredible new opportunities.

3D printing may break many barriers to entry, opening wide the gateway to previously protected markets.

Any competitor should evaluate the emerging opportunities to redefine the rules in his/her business with additive manufacturing and the opportunities to diversify or expand into new markets.

Some questions to assess the potential Opportunities your organization could be considering

The intent of the following questions is to make you think about the potential opportunities of a 3D printed product. The list of questions may evolve and readers are welcome to suggest additional or alternate ones (please use the comments).

  • Can you imagine any way 3D printing being applied in your business?
  • If 3D printing would be used in your business, what would it be for?
  • Can you think about a (more) disruptive way 3D printing could be used in your business?
  • What 3D printable product or substitute, if it (would) exist, may give you a cutting edge competitive advantage?
  • Could you offer a 3D printed substitute to existing products? What would its advantages be? What new or additional value would it bring? Would your customers want it?
  • Can you imagine expanding your business entering a new market (or segment) with a 3D printed product?
  • Are there any barriers to entry to a protected market you’ve considered that could be taken down with 3D printing / additive manufacturing?

You may have noticed that these questions are very similar to those about Threats. It is no surprise as opportunities for some are threats for others.


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Re-SWOT your business with 3D printing in mind – Threats

In a prior post of this series, I explained why it is wise to (re)SWOT your business with 3D printing* in mind. In this post, I propose some questions to assess the potential Threats your organization could be facing.

*I use “3D printing” and “additive manufacturing” interchangeably

With the recent progresses in 3D printing (and 3D scanning) with regards to materials that can be 3D printed, every business is potentially at risk to discover a 3D printed substitute offered by an unsuspected and probably unknown competitor.

Some questions to assess the potential Threats your organization could be facing
The intent of the following questions is to make you think about the potential threats of a 3D printed product. The list of questions may evolve and readers are welcome to suggest additional or alternate ones (please use the comments).

  • Can you imagine any way 3D printing being applied in your business?
  • If 3D printing would be used in your business, what would it be for?
  • Can you think about a more disruptive way 3D printing could be used in your business?
  • What 3D printable product or substitute, if it (would) exist, may disrupt your industry / your market / your business?
  • If a 3D printed substitute suddenly appeared, could you offer the same?
  • Does your organisation have any knowledge about 3D printing? Any know-how? If not, how and where would you quickly get the capacity to propose the 3D printed product? (me-too offering)
  • Did you evaluate how much savings a 3D printed substitute could earn?
  • Compared to 3D printed part or product, what are the advantages of your traditional way of manufacturing?
  • Would your customers continue to pay for if they had the choice with a new 3D printed substitute?

It is possible that going through the questions above, you sense opportunities more or as well as threats. Fine! Opportunities are the next topic to explore.


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My Takeaways from Big data, the book

I got my first explanations about Big Data from experts who were my colleagues for a time. These passionate IT guys, surely very knowledgeable about their trade, were not always good about passing somewhat complex concepts in a simple manner to non-specialists. Yet they did well enough to raise my interest to know a bit more.

I then did what I usually do: search and learn on my own. That’s how I bought “Big data: A Revolution That Will Transform How We Live, Work and Think” by Viktor Mayer-Schonberger & Kenneth Cukier.

Without turning myself into an expert, I got farther in the understanding of what is behind big data and got better appreciation of its potentials and the way it surely will “Transform How We Live, Work and Think”, as the book cover claims.

My takeaways

Coping with mass and mess

Big data as computing technique is able to cope not only with huge amount of data, but data from various sources, in various formats, able to show order in an incredible mess the traditional approaches could not even start to exploit.

Big data can link together comments on Facebook, twitter, blogs, websites and companies’ data bases about a product for example, even the data formats are highly different.

In contrast, when using a traditional database software, data need to be neat and complying to predetermined format. It also requires to be disciplined in the way to input data into a field, as the software would be unable to understand that a mistyped “honey moon” meant “honeymoon” and is to be considered, computed, counted.. as such.

Switch from causation to correlation

With big data, the obsession for the “why” (causation) will give way to the “what” (correlation) for both understanding something and making decisions.

Big data can be defined as being about what, not why

This is somewhat puzzling as we are long used to search for causation. It is especially weird when using predictive analytics, the system will tell a problem exists but not what caused it, why it happens.

But for decision-making, knowing what is often good enough, knowing why is not always mandatory.

Correlation was known and used before big data, but with big data and as the computing power it is no more constrained, limited to linear correlations, more complex non linear correlations can be surfaced, allowing a new point of view and even a bigger picture to look at.

I use to imagine it as a huge data cube i can handle at will to look from any perspective.

Latent, inexhaustible value

Correlation will free latent value of data, therefore, the more the better.

What does it mean?

Prior to big data, the limitations of data capture, storage and analysis tend to concentrate on data useful to answer the “why”. Now it is possible to ask huge mass of data many different questions and find patterns, giving answers to (almost any?) “what”.

The future usage of data is not known at the moment it is collected, but with low-cost of storage, it is not (anymore) a concern. Value can be generated over and over in the future, just going through the mass of data with a new question, another research… Data retain latent value until it will be used and used again, without depleting.

That is why big data is considered the new ore and it is not even exhausted when used, it is a kind of infinite usage. That’s why so many companies are eager to collect data, any data, many data.

Do not give up exactitude, but the devotion to it

For making decisions, “good enough” information is… good enough.

With massive data, inaccuracies increase, but have little influence on the big picture.

The metaphor of telescope vs. microscope is often used in the book; when exploring the cosmos, a big picture is good enough even so many stars will be depicted by only a few pixels.

When looking at the big pictures, we don’t need the accuracy of every detail.

What the authors try to make clear is not giving up exactitude, but the devotion to it. There are cases where exactitude is not required and “good enough” is simply good enough.

Big versus little

Statistics have been developed to understand what little available data and/or computing power could tell. Statistics are basically extrapolating the big picture from (very) few samples. “One aim of statistics is to confirm the richest findings using the smallest amount of data”.

The computing power and data techniques are nowadays so powerful that it is no more necessary to work on samples only, it can be done on the whole population (N=all).

Summing up

I was really dragged into reading “Big data”, a well written book for non-IT specialists. Besides giving me insight of the changes and potentials of real big data, it really changed my approach with smaller data, the way I collect and analyse them, how I build my spreadsheets and how I present my findings.

My takeaways are biased as I consider big data for “industrial”, technical data and not personal ones. The book shares insights about risks of the usage already made of personal data and what could come next in terms of reduction of or threat to privacy.


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Is 3D printing the ultimate postponement? Part two

In the previous post of this series, I used somewhat extreme examples to illustrate the benefits of postponement with additive manufacturing i.e. 3D printing (space exploration, ships amidst oceans and warfare). In this post I use more common examples about how the promises of these new techniques will disrupt existing businesses and bring new benefits to competitors and customers.

Spare parts for automotive industry, appliances, etc.

Spare parts are needed for mending cars or appliances for example. Until now, spare parts must be produced and kept in inventories in the eventuality someone needs a part. This happens eventually but it is hard guess to tell which parts, when and in which quantities parts will be required.

Therefore, spare parts production is launched according to complex and more or less scientific guessing, based on statistics. Once these parts are produced, they’ll go for various locations through the proprietary network or through  importers, distributors, retailers and repair stations.
Huge amounts of cash are kept frozen in inventories, scattered in many warehouses in various locations.

  • These inventories are likely to grow with each new specification change that affects a part, as the adequate replacement part must be provided
  • These inventories’ value will have to be depreciated when parts become obsolete and the probability of their sales diminishes

Storing and distributing spare parts is a business per se, but the value-added remains limited (which does not mean it is not profitable!), especially for the “players in the middle” who act more like cross-docking platforms taking their share of profits and risks.

Over time distributors and retailers slightly changed their business model and drift away from their original business: storage and retail.

In old days it was important to be the reliable parts provider and huge inventories were normality.

More and more those companies embrace a financial, more profit-driven purpose and keeping inventories is for them a necessary evil at best. Distributors and retailers try to get delivered at short notice in order to keep inventories – that is frozen capital and risk – low.

They push the problem upstream to manufacturers, the latter being required to reduce delivery lead time, which most often ironically means holding inventories to serve “off-the-shelf”. Distributors and retailers become a kind of post-office collecting orders, passing them over to manufacturers, who in some case have to deliver to the point of use, by-passing the distributor/retailer.

I worked in some industries facing this “problem” and the distributor / retailer channel in this way does not seem sustainable as manufacturers try to get rid of these “order collectors”.

Now with the rise of additive manufacturing techniques, new opportunities appear. Distributors and retailers may use them to become manufacturers themselves. What they need are competencies to use such equipments and managing CAD files from OEMs’ libraries, “print” spare parts at will: at the right moment, in the right version, without holding huge, costly and risky inventories of parts in huge warehouses, with high fixed costs.

Furthermore, customizing parts locally would yield additional revenue, as customers with specific and maybe urgent needs are willing to pay a premium.
So would scanning and redesigning no longer supported parts for which no CAD files are available.
This kind of service is an ultimate postponement because the manufacturing of parts is on hold until the very last moment, when the orders are confirmed or the parts paid!

This is one example about additive manufacturing (i.e. 3D printing) techniques can disrupt existing businesses and bring new benefits to (some) competitors and customers. The financial barriers to entry dropping significantly, OEMs could reconsider to re-integrate this kind of activity and keep the value creation all by themselves.

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Is 3D printing the ultimate postponement? – Part one

Imagine the first habitable base on mars. Your challenge is to pack the first cargo spaceship with all the necessary for the staff to face all maintenance issues, until the next cargo spaceship can lift up, say three months later.

Chances are you’ll include a 3D printer and enough of printer’s raw material, simply because it would be the most efficient way to provide many things needed despite tremendous logistics constraints.

Now quit outer space and consider a tanker, an aircraft carrier or container ship amidst the ocean. In some aspects, these vessels share common traits with our base on mars:

  • storage space for spare parts, raw material and machines for maintenance purpose is scarce
  • they are far from everything, can be supplied only after some delay
  • supplying them is not without some risk (weather, enemies, etc.)
  • supplying them is not only risky but comes at (very) high cost

In these cases too, 3D printing is a good option to consider as printing what is needed at the very moment it is needed is the optimum solution and ultimate postponement.

What is postponement?

In manufacturing and supply chain operations, postponement means delaying the completion of a product or packaging products until a signal assigns specific customer or destination. This is useful when many variants would lead to possible misallocation if the completion would be based on forecasts.

Put simpler, postponement delays a decision until what is expected is clearly specified. The reason is most of transformation step in a process modify the product in such manner that returning to previous state is impossible.

Example: if you cut a piece of fabric to make a handkerchief, it cannot be returned to a piece of fabric for a trousers’ leg. (except it was a huge handkerchief or tiny trousers)

Materials usually lose flexibility along the transformation process. Once transformed there is no stepping back.

Postponement is used to delay the completion or manufacturing until a differentiation point from which the item loses its flexibility (e.g. pack in white box and add customized label latter).

Because postponement and later completion is no realistic option for our vessels or space base, they must embark spare parts for all possible cases, but under constraint of volume and in some cases weight.

The embarked mix is a set of items based on forecasts and tradeoffs about what could possibly happen and what is most likely needed, still carrying the frightening risk that what will really be needed will not be included in the cargo.

Printing at will

Now if you can trade the same finite volume and mass of many different spare parts selected through complicated statistical computation for a 3D printer and raw printer material, the risk drops to almost none as any required part (as long as material is suitable) can be printed when required, and even customized to some unexpected specification change.

This is why NASA, the navy or some private companies consider to embark 3D printers and train staff in order for the unit to be independent from its supply base for a longer period.


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Benchmarking is only trouble!

It happens periodically. When managers are faced with improvement challenge, they ask for benchmarks. Not because they’re eager to take it on competition but to check if by chance they’re not already better or at least good enough, thus escape the challenge.

And this is only the beginning with trouble about Benchmarking.


Benchmarking

It is legitimate to measure one’s performance against a standard – and it makes sense to measure relatively to the best, not the average or the worst – and to define a strategy according to the gap.

The problem is once benchmark data are given, people generally get shocked by the amplitude of the gap and start to argue about the figures, content, calculation, conditions and a long list of other items in order to demonstrate the benchmark cannot be taken as a reference for them/ the organization.

All energy is wasted to reject the evidence instead of trying to fill the gap or even challenge to leap ahead of competition.

The second kind of common problem is that benchmark is often understood as a target. But being just as good as the best is limiting the ambition to being a follower, a me-too, a substitute. Is this really what the organization’s management wants?

Besides, all the efforts paid to catch up with the best can be ruined if the leader moves further ahead.

We can assume the leader has some reserves the challenger may not have anymore or never had first hand.

Benchmark is therefore only a reference, not a target. The organization’s target should go beyond the benchmark and the way to achieve it should (probably) be different than the leader’s.

Third problem is that finding relevant benchmarking data is sometimes difficult, impossible or out of reach.

Some people/organizations may grant access to some data but refuse to give any details, pretending they are proprietary.

Some people/organizations don’t hesitate to invent such data and generally do not share details which might uncover the trick.

The problem within this problem is that data may be real and accurate, but refusing to share details – what can be understandable for the sake of data protection – leads immediately to distrust:

  • are data trustworthy?
  • what methodology was used?
  • are data relevant, accurate?
  • and so on.

Fourth problem is that top management is generally pleased with the revealed potential. Closing the gap with the leader means more sales, more profit, more productivity, less waste, less costs, etc.

How-to is not top management’s concern, that’s why middle management is often puzzled with the objectives assigned after the “big” strategy consultants made their recommendations based on benchmarks. Squeeze out 25% more productivity or boost sales 20% is easier set (sic) than done.

Middle management tend to react as described in the beginning of this post, with shock and denial.

But here I think the problem is not about trustworthiness of data. Even so figures are just fantasy, the assigned objectives are to be taken for what they are: objectives.

The proper reaction of all the organization should therefore be to find a way to achieve them. It probably will require to think outside the box, be creative, search for breakthroughs.

Doing so will most probably help the organization to leap forward, maybe even beyond the goal.

Alas, the latter is seldom seen and it takes a lot of energy to explain this challenge to scared managers.

Therefore, from my experience, benchmarking is only trouble!

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Lean in digital age: sensors and data

In near future, technology and especially connected objects – smart things stuffed with sensors and so-called wearable devices – will supercharge Lean improvements.

One example of such already used device is given in a Mark Graban podcast about Hand Hygiene & Patient Safety. In this podcast (Episode #205), Mark’s guest Joe Schnur, VP Business Development at Intelligent M, explains how his wearable solution called smart band, (see video below) helps gather huge amount of accurate data compared to human observer with a clipboard.

You may listen to the whole podcast or skip to 13:30 and more specifically to 15:00 to hear about the wearable smart band, 21:50 about the data gathering.
http://www.leanblog.org/2014/07/podcast-205-joe-schnur-hand-hygiene-patient-safety/

Human observer has its limitations as to what information he/she can catch and how accurately it can be done. Think about fast events occurring often and/or tasks not easy to watch because of the layout. Human observations are therefore often limited to ticks on a pre-formated check sheet.

As human observers are high cost (compared to newer technology), they are used in limited number, during limited time and usually with sampling techniques.

Appropriate technology can gather many data for a single event: temperature, motions, duration, acceleration, applied force and what ever embedded sensors are designed for. These devices capture everything of each event, not only samples.

The cost per data point is obviously in favor of technology, not only because of quantity of data but also its quality (read accuracy). In near future the cost of these technologies will further drop, making automatic data collection available almost for free.

The mass of data captured allows using big data techniques, even so data scientists may smile at the “big” in this specific case. Nevertheless, with more smart objects and sensors everywhere (Internet of Things, Smart factories, etc.), the flood of data will grow really big and allow process mining, correlation search on a huge sets of parameters and more.

I am convinced that in near future, most of Value Stream Maps will be generated automatically and updated real time by such kind of devices/data sets, with ability to zoom in on details or zoom out for a broader view at will, and more.

The same systems will be able to pre-analyze and dynamically spot bottlenecks and sub-optimized parts in the process, make suggestions for improvements if not corrections by themselves.

  • Artificial intelligence with machine learning ability will suggest improvements based on scenarios stored in their literally infinite memory or on their predictions about potential problems.
  • The Internet of Things (IoT) will be made by objects communicating and interacting with each other.

What is likely to come are intelligent monitoring systems for any process, that build and maintain themselves, hence smart factories.

So, when Lean goes digital to that point, what will be left to humans?

This is a topic for a next post and an opportunity for you to give your opinion in a comment.

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You may also be interested by my series about What jobs in the factory of the future?

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Will 3D printing revitalize strategic analysis?

It seems to me that in the last decades strategic analysis focused mainly on monitoring new entrants from low-cost countries, struggling with competitors and entering emerging countries’ markets.

Compared to Michael Porter’s model of five forces, the above takes care about two at best; Threat of new entrants and intensity of competitive rivalry.

Reminder of the five forces:

  • Threat of new entrants
  • Threat of substitute products or services
  • Bargaining power of customers (buyers)
  • Intensity of competitive rivalry
  • Bargaining power of suppliers

With the rise of additive manufacturing techniques, 3D printing being a flagship for them all, competitors in some businesses may have to reconsider the basics and the neglected forces.

Threat of substitute products or services

Among the neglected forces, the threat of substitute products or services comes to mind quickly. What have been manufactured in traditional way with several machining and assembly steps could be produced in one step with additive techniques, for cheaper* and in many cases faster.

*Cheaper remains questionable if considered in high volume. What seems obvious is the cost of manufacturing replacement parts in additive manufacturing vs traditional manufacturing. In the first case, parts can be printed in units when needed while in traditional manufacturing, parts would be produced in minimal batches, regardless the real demand. If the other parts of the batch aren’t sold, they’ll be total waste thus no saving with economies of scale.

The new techniques have to be mastered but do not seem so difficult to master to be barriers to entry. If they would, it would be irony to see a long established competitor locked out of his own business because he didn’t prepare for the substitute. A case not totally unlikely to happen.

The new techniques are/soon will be available to anyone, which means capital investment or access to these technologies are no barriers to entry either.

This brings us to next threats: threat of new (unexpected) entrants, bargaining power of suppliers and buyers.

Threat of new (unexpected) entrants

With the new techniques made easy and affordable (still taking 3D printing as example), literally anybody can establish him/herself as competitor. This could be former buyers, customers, enabled to manufacture themselves what they had to buy before. Many of them may not create a business, but as they are many, if a majority prints products or parts themselves instead of buying them, it can be enough to kill an established business.

Former buyers like distributors may be more serious potential new competitor as they may consider creating value from raw material instead of storing and distributing goods. Manufacturing with additive techniques will require few capital while distribution requires huge capital sitting in warehouse, carries over costs and all the risks.

These new competitors would no more (not only) provide a service by selling off-the-shelf, but manufacture-on-demand and possibly modify, improve or adapt the products.

Bargaining power of customers (buyers)

Former customers, now new competitors, like distributors could enforce their bargaining power as they will not be competitors for the whole product panel thus keep being customers, which in turn could enforce bargaining power of suppliers.

Bargaining power of suppliers

The first suppliers of substitute products will certainly have some bargaining power, yet their position will most likely be quickly challenged, revealed “blue oceans” being attractive to competition and barriers to entry not really existing.

Additive manufacturing will very probably disrupt many businesses, yet I do not believe everything can be provided cheaper and better (what ever better means) with 3D printers and the like. Mundane items of daily use, produced in very large batches may still continue to be manufactured the way they are.
In many cases, consumers will continue to trust genuine parts and original maker’s products. Therefore, in some trades and businesses where the choice will exist, traditional makers may regain some bargaining power when it comes to compare quality, safety, trust, reputation, esteem value, etc.

Will 3D printing revitalize strategic analysis?

Finally will 3D printing revitalize strategic analysis? I do think so. Threats will multiply as well as opportunities and new options in manufacturing require to broaden the scope of analysis.


Related posts on this blog:

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Michael Porter’s five forces (video)

In several past posts related to additive manufacturing / 3D printing I mentioned Michael Porter’s five forces model, its real name being The Five Competitive Forces That Shape Strategy.
In this post, I pay credit to Mr Porter and let himself explain what the five forces are.


You may also like a brief video on this subject provided by Harvard Business Review: The Five Competitive Forces That Shape Strategy