Sachin Gopalakrishnan

We had been facing a moderate number of mistakes during our manufacturing process. Depending upon the stage at which the mistake was caught we had to spend ‘x’ amount of hours to rectify it.

Quite often this meant going back to the drawing board. This also meant stalling of our other components until the problem was sorted out. This caused a huge burden in our production process. Over time we had something drilled into our brains, The Cost Of Rectifying Mistakes!

Our process is divided into multiple stages

1. Design - The initial drawings are made and submitted for customer approval. The draftsman might spend anything between a few hours to an entire day on the drawing.
2. Procurement - This stage involves interacting with various suppliers, gathering of quotes and finally ordering for material.
3. Machining - The material is let out to subcontractors and machined at their premises. The costs are pretty direct going forward as the cost is a direct function of their wage rate.
4. Production - The job will go through a small set of processes including drilling, suiting etc. The costs are again a direct function of our wage rate. { Our wage rate > Their wage rate; refer 3 & 4 }
5. Assembly - The assembly fitters are paid the highest of the lot (excluding Design). They will assemble the components and test it to become a full fledged cylinder.

Normally each of the stages takes about a week for a moderately sized product ( We build a wide range of the same product ).

We found ( common sense really ) that the cost of rectification escalated as it advanced over different stages. This gives us a strong reason to NOT to commit mistakes. The idea of mistakes alone is long enough to warrant another post.

I hate bank X.

The employees of bank X were rated on their ability for higher number of ‘product sales’. As is the norm, the bank reviewed it’s employees vis-a-vis revenue generated.

This is akin to a local restaurant selling a large number of dinner plates in an effort to improve revenues but by compromising on quality. Restaurants are known by their food, ambiance and in general hospitality.

I do not intend to compare the hospitality and/or service industries. But this does warrant attention whether the revenue expectations levels by promoter and the satisfactions levels the customer expects from the company are aligned or should they be aligned?

Customers who will not hesitate to voice their opinion about what they think about your product/service and even sport a signboard to your competitor.

The bank had no system in place which measured customer satisfaction levels per employee(info-courtesy a friend who worked for the bank). A bit of googling helped me.

They may well do to read this(pdf) and see if it applies to them.

You can find a more pointed article on customer satisfaction in banks here(pdf). This professor has a view on the topic.

After a year of bad service i decided to close my peanut worth savings account with them and opened a new one with a larger more aggressive bank. I am a satisfied customer today.

Lack of a robust process brings out chinks in your system in unpleasant ways. The incident below is a classic example of such a case.

Our company had a long history of relationship with our subcontractors and had a certain element of trust relationship with them. Quite often we took whatever they said at face value specially regarding the amount of material lying with them. There was no physical verification and hardly any checks/preventive measures built into the system.

We recently found that a subcontractor had been hoarding our material and selling it off in the open market. It took an enterprising individual to catch the subcontractor red handed.

Mr. X was in charge of subcontracting. While there was no conclusive evidence against X of being hand in gloves with the erring subcontractor we didn’t initiate any legal recourse against him. But we had to let him go.

People in our company incorrectly assumed that the reason for our action was him being corrupt. My contention is maybe he was BUT maybe he was not!

The reason for his dismissal was not based on him being corrupt, it was based on his lack of diligence in such a responsible role. He had failed in his duties towards the company. As a professional he was totally in control of all subcontracting work and was expected to keep track of flow of all materials within and outside the factory. He was not only unable to bring such a discrepancy in our system to our notice but also tried to blame someone else for the faux pas!!

As one amongst the management, i admit, we are to blame too for not having a system in place to prevent this incident. As a learning we have come up with the following points.

1. List Of Pending Materials

This list should come out as frequently as possible and can be used quite effectively for follow-up. This seems commonsense but for a small company even this was unheard of until now!

2. Physical Audit

Conduct a physical verification of materials lying with the subcontractors on a quarterly basis. The audit should be conducted randomly once a month without announcement.

3. Get Them To Specialize

Restrict subcontractors to two or three type of jobs and if possible with two or three customers. This will help us in multiple ways,

1. They get to be experts in their allotted job-work.
2. Improvement in quality as we can goad them into buying the appropriate measuring instruments.
3. We know immediately who is handling what at any given point in time just by the job and customer.

4. Push Not Pull

update: We had to junk this idea as it increases inventory.

(Not to be confused with the push-pull system in marketing)

Send across the jobs to the subcontractors instead they coming in to take away materials. This would be difficult to implement on an existing system, but the benefits are obvious.

1. Nobody gets to hoard thus doing away with one more inefficiency.
2. We decide the flow of materials. Will also help us put in taps to decrease/increase flow as we wish!
3. There is very little scope of any influence of our subcontracting in-charge by our subcontractors.

Get them to sign each time as a sign of receipt of material. This will also act as a proof and will also be the pending list(on a given date) as mentioned earlier!!

5. Improve Ties

While a system can be improved and rebuilt over and over again, the foundation of any business relationship is trust from both the parties and trust alone will stand in good in the long run.

This list is not exhaustive and is a work in progress for the time being. Any suggestions or ideas are always welcome at mailme@REMOVET-THISsachingopal.com

used to be an avid Age OF Kings player. For those not in the know, it’s a multiplayer game played on an online gaming portal. You can form teams and compete against other teams. If you prefer you can also play a one-on-one i.e. two players compete.

Over the years i realized that a few concepts really stuck on to me even after i quit the game years ago. The reason i list them here is because i would rather jot them down here than anywhere else. Also it helps me give myself a perspective.

Here goes ..

1. Start Early

One of the most important aspects of the game was managing your economy. If you last the initial battles, then the strength of your economy alone will decide the course of the game.

Translated into life, this means start saving small but start saving!! The longer period you can save the greater the time your interest accrues to provide higher returns.

2. Give It All

Put in the maximum effort that you can in each and every battle, you might just win by a small margin, but a win is a win at the end of the day.

3. Salvage

The real good players never fought a losing battle and salvaged whatever they could, whenever they could.

This strategy might be slow and boring but in the long run it works.. and it works well!! Don’t batter yourself on a lost cause. You have to live to fight another day!

4. Controversy Is Short Lived

Kids quite often used to curse and call each other names just to garner attention.The name/fame associated with such incidents quickly fade from public memory.

Only true skill, ability will stand you in good stead over the long run.

5. It’s All In The Mind

I remember feeling very low before a game and totally exhilarated after a win just 15 minutes later. It was only a case of mood. He agrees.

6. Develop Good Habits

Habit yourself to always protect yourself (in game) and you will naturally construct a wall even without thinking every time you play.

Develop good habit in your daily life and you shall never go wrong. This is very similar to my stress on developing good processes than relying on people.

That’s it.

I was going through my RSS feeds in google reader and realised that i needed to either change my reading habit or remove a list of feeds which i never read. I went through these lists to check if there was anything which would interest me enough to not give them the cut!

Finally i removed a few, added a few and left alone a few. This made me think about the type of content i wished to see daily. I seem to prefer people with action items more than people with ideas. For example, i read the Microsoft Excel Blog a lot more than Seth Godin. This is not to say that iam not interested in ideas, i really am. But little Tid Bits do not seem to water my appetite any which way.

Also i preferred The Web Urbanist to Guy Kawasaki. Guy seemed more of a sensationalist even if brilliant on occasions with his mix of humour and intellect. I stick with the urbanist.

I realise that my preferences have changed over time. I preferred ‘Ideas’ in B-School and ‘Action’ now. Maybe my routine has got me more about thinking how to get things done rather than ponder on ideas which may or may not materialise in the future.

Top 5 Reason Why The Customer Is Always Right Is Wrong got me thinking on how many times we have had customers who are nothing but a cost to the company.

These customers generally form the Long Tail;

The phrase The Long Tail (as a proper noun with capitalized letters) was first coined by Chris Anderson in an October 2004 Wired magazine article ^[1] to describe the niche strategy of certain business such as Amazon.com or Netflix. The distribution and inventory costs of those business allow them to realize significant profit out of selling small volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. The group of persons that buy the hard-to-find or “non-hit” items is the customer demographic called the Long Tail….

Credit Card Issuers face such people all the time. If you were in a business of non standard products; how would you tackle this situation? Some software product companies circumvent this problem by trying to route support calls from rare customers and customers who only call never ask for paid support to the paid line.

What about a real tangible product like ours? The only thing they can do is to reduce the carrying cost of such customers to as minimal levels as possible. This helps them retain market share (credit cards are a highly competitive market) without being a burden on the bottom line.

There was a time when i used to work for a BIG company. I was paid a decent amount of money. I could afford a reasonably good lifestyle. But it was also a time when i had few pals and i had to drag myself to work 60% of the days.

I had colleagues then i had friendly colleagues then i had one or maybe two friends! Now i have almost all the staff as pals and i have never ever dragged myself to work. I enjoy the banter, the glib talk, the little fun we keep having over tea.

We have also posted a healthy growth over the past few months. I think the above two aspects i.e. we having fun and accomplish good work at the same time have been instrumental.

The clinching factor is not “fun + work“. It’s all of us coming to work with our own personalities. We are much likeable and agreeable in person than our work lives! This way we like each other and enjoy each others company. Which indirectly makes us more productive!!

Not having a work mode translates into living a better and happier life. We display the same emotions which we would have displayed out of work. We crib openly about work load, sometimes about pay. I know i get to hear the most of it as iam the boss!!

This might be a lop sided view of my world, but hey i still love it!!

An Information System should at the very least avoid duplicate work and keep processes as simple as possible.

A thumb rule to gauge the level of simplicity in any organisation is to consider the time and effort involved in training a new recruit!

The faster a new hire can be trained the higher are your chances in being effective and thus competitive.

We have a couple of hundred customers. Some of them work on about 5 - 10 projects at any given moment i.e. the projects which have a bearing on our production.

When the customers call us, they tend to use their project number as a reference code. This is very natural as they use the same code internally in their company and is easily recalled from memory.

We need to cross check each project and tally them with their purchase order numbers. Then tally the Purchase Order(PO) number with our Order Acceptance number(OA).

Once upon a time, this OA would have to be tallied with our Process Chart(PC) number.

PN - Used by Customer

PO - Used by Customer

OA - Used by Administration (our side)

PC - Used by Work Center (our side)

The arrows indicate “flow of thought” as in, using PN we know PO, using PO we know OA and so on..
#1

Later we changed the equation;

#2
[OA and PC numbers were made the same]

Now we could directly substitute PC for OA.

#3

I recently asked a customer to quote his PO so that we could easily pick up his order and provide him the requested information (status) quickly.

Now #3 has changed to,

This way the only loop the customer has to jump through is provide his PO.

It is extremely easy to teach someone to use the autofilter OR use “cntrl + F” in a spreadsheet. It might take us a few seconds.

Now try teaching the older system to a new comer!!

On the other hand the older system is cumbersome and confusing, especially to a person who is new in the organisation.

In an age when every person who comes in has to hit the ground running, this simplicity could give the company the ability to stay ahead of the curve!!

There is an update please see below.

We have a man in our machine shop. He has been working with this company for more than a decade. He began as a ‘helper‘; then graduated to work on the drilling machine and later in assembly. Now he is a staff member and is in charge of assembly.

He was promoted time and again in spite of other people being around because he was diligent as a worker. He took pride in his work. He was honest and a man of integrity.

His job now, is to collect materials and make them available for assembly. We call them collectively, Assembly Items. The items are scattered throughout the factory floor due to different processes and thus different machine work and thus different locations.

His job takes him hours just to collate one set. Imagine the productivity hours lost.

Collation of items should be imbibed into the process rather than have someone find and then collate it. Basically his job is redundant and is a useless activity. What we have done by promoting him is KILL his productivity. His job is a ‘pseudo job‘.

There are numerous such instances of productive people turned unproductive due to an un thoughtful promotion. In the above case if we decide to rectify the process and change the layout and in general make changes which will eliminate this pseudo job, his job will be rendered useless which is undesirable for such a worker.

This is a classic case where appreciation has become a bane for the incumbent.

update: There is a name for such phenomena, The Peter’s principle.

The principle holds that in a hierarchy members are promoted so long as they work competently. Sooner or later they are promoted to a position at which they are no longer competent (their “level of incompetence”), and there they remain.

Peter’s Corollary states that “in time, every post tends to be occupied by an employee who is incompetent to carry out his duties” and adds that “work is accomplished by those employees who have not yet reached their level of incompetence”.

How to not forget where you kept your keys. How to not forget paying any particular bill.

Now this is what most people do,

They keep the keys in the same place everyday, some place easily in sight while on the move.

They either pay it as soon as the bill arrives or keep a particular day of the month for paying bills.

The first one is the most effective because it almost always works. The second one is contingent upon our disposition to do the earlier assigned work right away.

Almost always its the process which is at fault and not people!