I would like to start a discussion within the shipbuilding industry, or any industry, on the value from a customer's perspective, of value-added services or products.
Our specific concern is this. As a service-firm, who offers design services to the shipbuilding industry specializing in production design, I would like to get the customers' thoughts on what is worth paying for, and what is not.
Genoa Design prides itself on adding much value through our services to our customers...value beyond the scope of work. The value is hidden within small and specialized technical processes that allow our customers to save money and time through little things we include in our deliverables. Examples are: complete check dimensions, advanced build strategy with integrated piping and structure and outfit, profile plots showing bending offsets and inverse bending information if applicable, extra details in assembly drawings, a guaranteed process-driven design sequence that automates many design steps thus improving quality, and most importantly, up-front design checks that solve problems and issues and fill in missing information up front, so that the fabricator does not have to deal with issues on the floor.
Our impression is that many competitors follow a strict protocol, that outlined bluntly, means "whatever is presented on the drawings is lofted and delivered to the shipyard". This can lead to serious problems and difficulties on the shop floor.
By investing time up-front, we usually forcast most issues, get them solved earlier in the production design process, and deliver information to the yard that is mostly issue free.
The problem for us is that we embedd this process into our quotations, but as a result, we do not win every bid competition. We have to place some value on this extra time and effort, which we know beyond certainty, is worth every penny. Although our Lean processes offset this effort, the total contract value often leads to a slightly higher price. Still competitive, but just enough higher to notice.
So... when the fabricator is faced with two quotations to complete the job, they will usually choose the lesser of two prices. Esepcially in these economic times. The lower price often does not include the "value-added" service we provide.
I have several questions....
1. Should we simply eliminate this step of advanced problem solving?
2. Should we remove our value-added features? (extra details on drawings, extra plots, extra information)
3. Should we go to the trouble of quantifying these features and presenting them as options in a quotation?
4. How aggressive should we be when awarded a project, then trying to charge for extras and changes because they were not included in our scope of work?
5. Should we just drop our prices and operate without a margin, thus winning contracts, then proving the importance of our value-added services, hoping that we gain customer loyalty?
6. How can we make our customers aware of what we can do for them?
7. How much effort should we invest in educating our customers?
8. If customer education involves their own analysis and measures and metrics, how can we encourage customers to make this investment?
9. Should we model/design/loft the information that is presented exactly on the drawings? Then worry about changes and extras later?
I would be anxious to get some serious feedback on this.
Yes, I know the answers to some things. We cannot take the easy way out. We have to invest ourselves, in order to gain customer loyalty.
One way to achieve loyalty and impress customers is to consistently exceed expectations.
Mind you....we have done this in the past....and still we can lose a project, lose a customer, or experience the disappointment when a customer will try another vendor for some unknown reason.
Does the answer lie in a Lean Value-Chain? This is a new concept to the shipbuilding industry. How do we start this?
The bottom line is that we are all human.
When purchasing a used vehicle, and presented with two identical looking vehicles on the outside, many of us will choose the least expensive, hoping that the life-cycle cost is low. We are often willing to assume the risk. Sometimes we end up spending more down the line, in addition to the hastle of continued time-consuming maintenance, instead of making an investment up-front. Sometimes we get a great deal. No maintenance, no problems. Sometimes we buy a lemon. And man...that hurts.
When we want our van painted...and one painter will produce an excellent job with top quality paint, plus paint a dragon on the side of the van, and the other painter will produce an excellent job with top quality paint minus the dragon....many of us will opt for a dragon-less van. How about UV protection? Clear-coat? Free wash and wax? Free touch-ups for the next six months?
But in the words of a good friend...."I think the world needs more dragons".
Me...I think we all need touch-ups.
If you read this...let me know your thoughts....
Friday, July 9, 2010
Thursday, July 8, 2010
Progress on Mini-Kaizens
So we have our Mini-Kaizens all ready now....and with some final input from project managers we are ready to deploy next week.
Each Mini-Kaizen can be equated to an A3. We are not using the A3 presentation exactly; we have used a written text format. But, we have followed the A3 process to define the problems, define the root causes, define our countermeasures, achieve agreement, create a plan and timetable, and build in continuous improvement. Each Mini-Kaizen, or A3, is linked directly to our Hoshin Kanri. The Hoshin Kanri is fed by our overall Lean Transformation project. Year by year, diagnostic score feeds the Hoshin Kanri and helps us measure success and achieve focus.
Back to our Mini-Kaizens.
The author of each Mini-Kaizen, our VP Operations, knows each problem and each person or team who accepts the responsibility for completing the Mini-Kaizen knows the problems. They live them each day. The problems do not need further explanation through the analysis afforded by the A3 process. We have defined the root cause. We know who owns each problem. We know the countermeasures.
Each individual problem feeds the bigger problem in our office, which is lack of documented procedure. We are in fact skipping a step, which is mapping current state, and jumping directly to future state. We have analyzed and concluded that mapping current state is no value to us, since there is no current state other than individual preferrence.
I would equate our engineering environment to a manufacturing plant where the manager asks the employees to build the widgets, and each employee uses their own preferred method of building the widget. Did I just define chaos? Well....we are not quite there anymore. We were....but not presently. We have defined process equivalent to setting up individual work tables, in a specified sequence. Now....we are working on individual cell process.
I'll reiterate.. in an engineering environment, the tendency is for each designer (engineer) to use their own methodology to complete any given engineering task. This methodology is learned in school and through experience on the job, and often under the mentorship of more experienced engineers and designers.
Our goal is to combine the best practices and arrive at a procedure, and value stream map, that represents our best shot at defining a future state. By bringing teams together, we can establish a set of Genoa acceptable procedures to complete engineering and design tasks.
These Mini-Kaizens are our attempt to organize which work cells we map and improve first.
We have many work cells complete...and we are missing many more.
As each work cell (individual engineering task) is mapped and the procedure is set, the documentation and SOP is catalogued, then disseminated to staff via document distribution and training.
Continuous improvement is addressed in year 5 of our plan....and we are presently in year 3. Refer to the chart.
I'll post further once we have deployed these Mini-Kaizens and start to see deliverables and outcomes.
Each Mini-Kaizen can be equated to an A3. We are not using the A3 presentation exactly; we have used a written text format. But, we have followed the A3 process to define the problems, define the root causes, define our countermeasures, achieve agreement, create a plan and timetable, and build in continuous improvement. Each Mini-Kaizen, or A3, is linked directly to our Hoshin Kanri. The Hoshin Kanri is fed by our overall Lean Transformation project. Year by year, diagnostic score feeds the Hoshin Kanri and helps us measure success and achieve focus.
Back to our Mini-Kaizens.
The author of each Mini-Kaizen, our VP Operations, knows each problem and each person or team who accepts the responsibility for completing the Mini-Kaizen knows the problems. They live them each day. The problems do not need further explanation through the analysis afforded by the A3 process. We have defined the root cause. We know who owns each problem. We know the countermeasures.
Each individual problem feeds the bigger problem in our office, which is lack of documented procedure. We are in fact skipping a step, which is mapping current state, and jumping directly to future state. We have analyzed and concluded that mapping current state is no value to us, since there is no current state other than individual preferrence.
I would equate our engineering environment to a manufacturing plant where the manager asks the employees to build the widgets, and each employee uses their own preferred method of building the widget. Did I just define chaos? Well....we are not quite there anymore. We were....but not presently. We have defined process equivalent to setting up individual work tables, in a specified sequence. Now....we are working on individual cell process.
I'll reiterate.. in an engineering environment, the tendency is for each designer (engineer) to use their own methodology to complete any given engineering task. This methodology is learned in school and through experience on the job, and often under the mentorship of more experienced engineers and designers.
Our goal is to combine the best practices and arrive at a procedure, and value stream map, that represents our best shot at defining a future state. By bringing teams together, we can establish a set of Genoa acceptable procedures to complete engineering and design tasks.
These Mini-Kaizens are our attempt to organize which work cells we map and improve first.
We have many work cells complete...and we are missing many more.
As each work cell (individual engineering task) is mapped and the procedure is set, the documentation and SOP is catalogued, then disseminated to staff via document distribution and training.
Continuous improvement is addressed in year 5 of our plan....and we are presently in year 3. Refer to the chart.
I'll post further once we have deployed these Mini-Kaizens and start to see deliverables and outcomes.
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