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Cambashi's e-Xpertise for Industry Issue #1

The business impact of IT, for industrial managers

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March 2007

In our first issue John Dwyer, editor, outlines our reasons for creating this new ezine. We then look at what makes good manufacturers great in Innovation the easy way before looking more closely at what happens in the construction industry in Making a material difference. Finally Julia Hawkins reviews Who moved my cheese by Dr Spencer Johnson.

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Editor's comment

At this, a critical stage in manufacturing's history, its practitioners don't need another source of news. But they're crying out for analysis.

The internet makes so much information available that there is a great temptation to shut the door. True, there is a preponderance of sales messages, but that is not the internet's main failing. It is that, even after careful filtering, so much remains that the user feels like a business person who, packing for a big out of town meeting, knows all too well that the bulging suitcase they're sitting on is full, but doesn't know whether it contains the essentials: air tickets, that sales chart, or even a pen. Do they take a chance? Or go through the case yet again?

The Cambashi quarterly e-zine hopes to penetrate at least parts of the thicket to bring you the messages that, after over 20 years researching the business reasons for using IT, we think we're pretty good at discerning. That means we know about industry and the technology that, carefully applied, can make its processes so much more effective. And we know how good technology and bad implementations can mix to give technology a bad name.

But the focus will be on business, because our readers will be industrial managers interested in information technology's business impact. What are industry's business drivers? How do companies translate their response to these into business initiatives? How should middle managers interpret these initiatives? What manageable actions should they carry out and, only then, what information technology will support those actions?

We believe information technology can be a force for good, and we will encourage investment in appropriate forms of it, but our analysis will be based strictly on realistic expectations of a return. We will be independent of any vendor and will not carry advertising or promotional material.

Our readers can expect us to cover a wide variety of sectors from mining through manufacturing and construction to distribution and even some retail. What they won't find is much about media, the public sector and computer games.

Our tone will be generally positive but, though we will not criticise individuals or companies, we will not shirk difficult issues. The prime example is this century's peerless paradigm shifter, climate change. If we believe groups of companies are failing to respond to global warming we will say so.

In the same vein, the e-zine will have an international, not local, focus. We will not condemn outsourcing to low cost countries, for example, preferring to balance the benefits to employees in the outsourced country against the costs in terms of service levels in the outsourcing country.

Our industries have never faced greater challenges than they do today. And we expect those challenges to increase rather than diminish. We are determined to offer those in industry information tools that will make a difference to their ability to meet those challenges.

John Dwyer

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Innovation the easy way

By themselves manufacturing's holy trinity - quality, cost, and delivery (QCD) - aren't enough, however well you manage them. The trio merely makes mediocre manufacturers good. What makes good manufacturers great, and equips them for long term survival, is innovation. This is not because so few do it well; it's because so few do it at all.

Though there aren't, there can't be, rules for innovation there are short-cuts - a bigger mould or a change of colour or shape. Soap-products company Cussons changes the packaging of every SKU (Stock Keeping Unit) in its Kersal Vale factory twice a year.

Innovation is often derivative and eclectic, searching out patterns and examples beyond its deployers' normal experience. George de Mestral, the inventor of Velcro, was an electrical engineer, not a garment maker. And he studied burdock seeds, not how other apparel makers fastened their clothes. Mars Electronics moved from coin mechanisms to amateur yachters' navigation systems. Nokia's roots are as a paper company.

A third tactic is to ask deep questions about the materials you're using and how and why you're using them. Still another is to look at best practice in other geographies.

In the following article we combine all of these and take a look at the construction industry, whose current state of introspection has many lessons for manufacturing.

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Making a material difference

Six months ago a benchmarking report for the EU by veteran chartered surveyor Bernard Williams put UK construction at the bottom of the European heap. Belgian construction workers earn twice as much as those in the UK, but Belgian buildings cost half as much to put up as ours. Why?

Williams found that the Belgians used their resources better. They have substituted industrial processes for on-site craft skills. And there's much closer involvement between designers, architects and constructors than in the UK.

The construction industry has its equivalent of manufacturing's 'make versus buy' conundrum. The UK choice appears to be to bring raw materials to site and do the fabrication there. Says the European Construction Industry Federation's John Goodall, "Gangs of men struggle long hours on site in all weathers bending steel reinforcement and pouring liquid concrete into bespoke designed formwork." In Benelux, Germany and Scandinavia, by contrast, large, highly-developed concrete industries deliver precast concrete structures to highly trained, well paid teams of 'lean' site labour to erect at breakneck speed.

The questions the Williams report poses for construction about the materials it uses and how it uses them are as cogent for manufacturing as they are for construction, albeit framed in slightly different ways.

For example, construction now has plenty of evidence that its materials have to be produced in a more reliable, industrialised process that ensure the consistency needed to deliver acceptable quality. Consistent processes and consistent products mean:

- Less waste and lower material costs. There is no longer any need to build in a safety margin of extra material.

- Better understanding of the materials. The producer can both apply the processes that deliver the best result and make sure the feed stock is of consistent quality.

Achieving these benefits means new skills and a change in the way they are deployed. Specifying materials is too complex to be left to architects, who largely specify on 'look'. Reality means a trade-off between look, availability and cost, and a skillset that knows where to get material and what to do if that source dries up. And note that new CAD tools allow specifiers to deal even with the 'look' issue (see the news from LightWork Design).

The building design process has to take in the total picture, including what is possible, what is economic, and how they differ from what is actually proposed, including peripherals like packing and the differences in cost between standard- and odd-sized doors and windows.

As in every other industry, whole-life concerns are radically changing construction's ideas of just who the customer might be. Building a house for a developer is not the same as building it for an owner occupier. The occupier wants long-life hardwood fittings. The developer prefers cheaper softwood.

Inevitably climate change has increased pressure for homes to be 'sustainable', or carbon neutral, lowering running costs dramatically but increasing up-front costs for triple-glazing and better insulation.

But climate change has deeper implications. It takes an awful lot of carbon-hungry energy to make a rolled steel joist (RSJ). The case for wooden beams is that timber from a sustainable source locks up its carbon for a hundred or more years, and it's part of a drive to replace energy-hungry materials with more timber in big and small construction projects. Some housing projects are even moving to wattle and daub.

Most of industry has little time to rethink how they work and what they use, so most choose familiar materials rather than think about alternatives. But changing materials is one relatively easy way to gain competitive advantage.

So give change a budget. Bring someone in from a university or consultancy to explain the options.

If you don't bring in an outsider, you are not on your own. Software tools exist to help select materials, recalculate material strengths and so on. Moulding CAD firm Moldflow, for example, provides software that does the calculations for those larger plastic mouldings you thought were impossible.

Mike Evans

Who Moved My Cheese? by Dr Spencer Johnson, Vermilion ISBN 0-0918-1697-1

Few medical practitioners become revered in management circles. Dr Spencer Johnson is a former physician whose work as co-author of the international best-seller The One Minute Manager has made him well known in almost every boardroom.

The Johnson website says Who Moved My Cheese? has sold 21 million copies. Written in the same easy-to-understand style, its unique insight and storytelling make it memorable as well as enjoyable. The parable tells the story of four characters - two mice Sniff and Snuff, and two Littlepeople, Hem and Haw - who live in a maze and look for cheese to nourish them and keep them happy. However, their environment changes when someone moves the cheese, and the book details the effect this has on the individuals, how they each cope in their different ways with the change, and the lessons that can be learned to deal with change successfully.

The story characters represent parts of our character regardless of our age, gender, race or nationality. The cheese is a metaphor for what we want in life eg career, money, freedom, etc and the maze represents the environment where we look for what we want - organisation of work, the community we live in, family. Although written simply, the book's value lies in how you interpret the message and apply it to your own situation.

Change is inevitable - learn to deal with it! This book is a light hearted approach to getting us to look at change in a different way. Though the parable can be applied in all areas of life it is particularly relevant to work, where change is ever present. For those who are faced with the challenges of change this book is a humorous reminder of the lessons that can be helpful in anticipating change and adapting positively to it.

Move with the Cheese!

Julia Hawkins

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