Let’s take Greg Eisenbach’s totally on-target analogy and expand just a bit. Greg points out:
…a world class swimmer is only 9 percent mechanically efficient. This means 91 calories out of 100 in swimming are lost due to friction.
For the non-world class swimmer the best way to increase your speed is not to spend more calories, but figure out how to become more efficient. A gain from 3% efficiency to 4% efficiency would represent a 33% increase.
Business is the same way.
This probably explains why a little thing like the new technology in competitive swimming suits had such a huge (and controversial) impact in the 2008 competitive season. In competitive swimming, small advantages are huge advantages.
One of the big differences, though, between swimming and business is that a competitive swimmer knows, in real time, that he is winning or losing. Triathlons aside, a typical swim race is under a minute, a long one might be a couple. In this competitive environment, it is impossible to be complacent and believe you are in the race when, in fact, you are not.
On the other hand, I have worked with a number of businesses (or operations within larger businesses) that have had a truly amazing capacity for denial. What else can explain a headline in a company’s internal newspaper that exclaimed the “big order” when, in fact, the customer had placed a mixed order, giving 80% of it to the competitor… but no mention of that inconvenient truth. So when this company also wonders why people feel “no sense of urgency” you have to wonder. Of course the real story was all over the local news, about how the competitor had gotten the bulk of the order, and how the local company had “lost” it, only getting 20%. What does that do for the corporate credibility? Not much.
World class swimmers are 9% efficient. World class manufacturing value streams are about 40% value-add. (By % value-add I mean the time the product is actually in the value stream vs. the time something that matters is actually being done to it.)
Contrast this with a typical manufacturing flow where the value-add can easily drop into single digits.
This is basic stuff, but sometimes we forget what this lean stuff is about.
Consider a 10% value-add flow. Out of 100 minutes in the plant, 10 minutes are spent actually processing. The other 90 minutes are just sitting, moving, counting, stacking, etc.
Let’s say I spend my time and energy to speed up the value-adding process (like make the chips fly faster, speed up the processing time, find some high-tech fast curing compound). Let’s say I am really successful and cut that value-adding time in half. Whoo-hoo.
Now out of 95 minutes in the plant, 5 minutes are spent actually doing something.
Not exactly a stellar improvement, no real impact on lead time, no reduction in inventory, no reduction in waste. All of the original costs are still there, and I have probably just added more.
On the other hand, if I were to focus my time and energy on reducing that 90 minutes of “other stuff” I run into a couple of realities.
First, all of that “other stuff” costs time, money, space and accumulates inventory. It adds to lead time. Cutting it in half cuts the lead-time from 100 to 55.
And critically important – these changes are typically pretty easy to make. They don’t require engineering or computer science degrees, they just require watching the work and asking “Why is this stopping, why can’t it just go to the next operation right away?”
Greg is dead-on with his analogy. The difference, though, is that there is much higher potential for businesses to improve than there is for swimmers.
But like swimming, small advantages are huge advantages. It isn’t the companies that make the “blitz” type of changes that are sustaining world-class players. It is the companies that, every day, scratch out another little improvement.
It is those “a little every day” companies that, over time, build an insurmountable lead. They engage more of their people, and they learn as an organization what continuous improvement is all about. The “blitz” approach retains the knowledge in the few experts who are responsible for all of the kaizen activity. As good as they may be, they can’t be everywhere.