Friday, October 31, 2008

It's Just Your Imagination...

I make data-driven decisions, or at least most of the time. As an engineer, I love data. I love to collect it, analyze it, and tease useful information out of it. I like to present the data in compelling ways that allow my clients to make sound decisions. In my love for data, I often fail to see that perceptions are just as important as reality. In fact, none of us really knows what's real, only our perception of it. We make decisions based on our perception of reality, whether that perception is backed by verifiable science or not.

Why do I mention this today? Why should you care? I'm currently planning a project with a long-time client. This is a client that has done a wonderful job of meeting the challenges of being a manufacturer in the global economy -- a manufacturer that's very profitable and located in the US! I realized that some actions that are being taken are based more on perception than data.

So which is more important? Data or perception? They are both equally important as factors in making decisions. If you are attempting to improve a process or a system, you must be aware of the factors driving decisions, and you must always bear in mind the impact of the filter through which each of us views our reality.

Saturday, October 25, 2008

China Supply Chain Management -- What's Old is New.

When people find out I work in China, they often want to know my opinion on the most recent China-related quality issue. My first thought is always "when did companies stop managing their supply chains?"

I know that each event is different, and there's usually plenty of blame to go around; however, according to ISO 9001:2000, section 4.1

"Where an organization chooses to outsource any process that effects product conformity with requirements, the organization shall ensure control over such processes. Control of such outsourced processes shall be identified within the quality management system."

ISO 9001:2008 will clarify that "the type and extent of control to be applied to these outsourced processes shall be defined within the quality management system."

Also, ISO 9001:2000 section 7.4.3 Verification of purchased product:

"The organization shall establish and implement the inspection or other activities necessary for ensuring that purchased product meets specified purchase requirements.

Where the organization or its customer intents to perform verification at the supplier's premises, the organization shall state the intended verification arrangements and method of product release in the purchasing information."

I'm not claiming that purchasing product in Ningbo is the same as purchasing product in Flint, MI. Nor am I claiming that ISO 9001 is universally applied in China (I'll post on that at a later date). Many of my clients are small companies that don't have ISO 9001 certification.

I'm also one of those China experts that likes to write articles about my fail-proof techniques for insuring success with your sourcing operation. But let's be very clear, ISO 9001 has long required companies to manage their supply chains, no matter where they are. In short, the challenges for managing your supply chain are different in China and the US, but the requirements are exactly the same.

Tuesday, October 21, 2008

Critical Steps in a Sourcing Project

It's always good to refresh some basics. Let me point you to a short article that I wrote some time ago about sourcing basics. I've seen a couple similar lately on China-related sites, so now's a good time to bring this up again.

Critical Steps in a Global Sourcing Project

Monday, October 20, 2008

Time for an US-PAC

My family and I have always been mindful of our expenses. Like most people, we've occasionally splurged on a vacation or other expensive toy/ pastime, but on average, we've been pretty good. We live below our means.

A recent flight to Houston gave me a couple of hours to ponder business and family expenses, and look for ways to save some more money. I looked at that list again this morning, and was appalled!! You see, my biggest expense is taxes! Next to the tax line in my calculations, I had placed a little 'x', meaning ignore it. Ignore it!! There's nothing I can do about it anyway!!

In a year that has seen many businesses fail, my own business has also been running very lean. In a year that I will barely pay myself, my biggest expense is taxes!! Now I know that some of you will say, "That's why you should vote for McCain (or Obama)." But the taxes I'm talking about are from the State of New York!! Specifically, my property taxes, but there are so many other taxes here they must have hired a whole consultancy of creative accountants to come up with these. In a year that the New York state budget is hemorrhaging money, there is still a state employee handing me a toll-ticket for the Throughway instead of a handy, automated ticket dispenser.

The truth is, it doesn't matter who we send to Albany or Washington, DC. I hate to be apathetic, but the reality is, the spending is so ingrained into the system, that nothing but a wholesale reboot will change things.

So if voting won't do it, how about we form an US-PAC. Let's form a political action committee and buy our own slate of talking heads. Let's start a website, post questions, vote for a consensus, gather small contributions from many, and then buy a candidate to represent us. (Ok, so I also mourn the loss of the Republic, and this is something of a pure numbers/ pure democracy format, but it will get things started.)

Let's start with something we can all agree on such as "simplify the tax code to allow all income tax filings to be done on 2 pages or less. Eliminate tax loopholes and set a tax rate which will be published and easily known to all." It doesn't matter if it's progressive, flat, whatever, just that it's known and understandable. That's a first step -- we can argue the form of it later.

What do you think? (Obviously, I'm being cynical about "buying" a candidate, but you know what I mean. If PACs didn't work, they wouldn't exist, or be so well funded.)

Tuesday, October 14, 2008

China's Electric Car

China Economic Review pointed me to this article in the WSJ: "China's BYD to Begin Selling Electric Car Next Month." It's not likely that such a vehicle would pass US safety tests, and certainly US consumers have a much higher expectation for quality and service than their Chinese counterparts, but you have to be seriously impressed by the amazingly fast time to market. I hope this little car is a resounding success! Apparently, a company largely owned by Warren Buffett, MidAmerica Energy Holdings, has made a significant investment, so it seems there's some real promise here.

Friday, October 10, 2008

Eyes on the Future 2008

I had the good pleasure this morning of attending Eyes on the Future 2008, a greater Rochester region economic summit. Overall, it was a good event, made better for me by the company of my 16-year old daughter, who didn't seem too terribly bored.

The timing of this event couldn't have been better. Folks in New York need some hope. The credit crisis and ensuing market devastation is just the beginning. I learned today that 20% of New York's government revenue is dependent on Wall Street, meaning that New York is facing a $1.2 Billion budget deficit. In addition, this recent report from the Tax Foundation places New York near the bottom of business friendly states, based on tax policy. New York was 49 out of 50 -- only New Jersey was worse.

The event featured a panel of business and community leaders from Rochester as well as a business leader from Cincinnati, OH and an educator from Columbus, OH. Most of the discussion was upbeat, and all agreed that Western New York and the greater Rochester area have many assets that should be marketed, among them fantastic institutions of higher learning, a climate of innovation, a skilled and relatively low-cost work force, a good inventory of affordable homes, and abundant water. There was also agreement that the biggest problem we face is high taxation. (I will state from experience that this is the highest taxes I've ever paid, for services that are not world class, and a crime rate in the inner city that's appalling.)

The star of the event, if there can be such a thing, was clearly Richard Kaplan, President and CEO of Pictometry International Corporation. Mr. Kaplan was open in his criticism of government, and its ever expanding role, but also agreed that we need to take care of our neighbors who may need our help. I plan to learn more about him, and I'll let you know what I find out.

The event closed with a speech by Governor Paterson. He was honest about the current economic crisis, and was clear that services must be cut. On a positive note, he also stated that we will use this crisis as an opportunity to break the habit of spending that we've grown into. I was glad to hear him speak so directly about what we must do to restore our economy. If I may be a bit critical about one issue, he stated that manufacturing jobs are returning to the U.S. (did he say Western New York specifically? I don't recall.) due to rising costs in Asia. Rising costs in Asia, China in particular, are no surprise to you, I'm sure, and there are plenty of examples of parts found cheaper in the U.S. Governor Paterson gave two examples of a timber company moving from Nepal to Virginia, and a cement company moving back to Ohio. With due respect, neither of those places is New York, and if we're waiting for the manufacturing jobs to come flowing back to Western New York, we've got a long wait. He did mention other ideas, fortunately, including investments in technology and clean energy.

I like Rochester and the surrounding area, and I agree that we do have many blessings to be thankful for. I also think that there is great potential here, and that someday, this potential will be harnessed. Until then, events like Eyes on the Future keep us challenged to do our part, and keep the conversation alive.

Saturday, October 4, 2008

Bailout! They Just Can't Help Themselves!!

Maybe you agree with the bailout, maybe you don't. Whatever your feelings, you've got to be stunned at the number of earmarks in this piece of legislation. While our elected officials worked into the wee hours to save us from certain disaster, they found time to spend another $100B+ of our hard earned money!! This is almost criminal, and if I can find a list of names associated with this I'll certainly link to it.

I've extracted a couple of my favorite parts -- from text I located on the New York Times site. Which ones do you like? These are just great!! I don't see how we'll surive without this!! Alright, anything that helps rum production, I'm for...


Sec. 308. Increase in limit on cover over of rum excise tax to Puerto Rico andthe Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 310. Extension of mine rescue team training credit.
Sec. 311. Extension of election to expense advanced mine safety equipment.
Sec. 312. Deduction allowable with respect to income attributable to domesticproduction activities in Puerto Rico.
Sec. 313. Qualified zone academy bonds.
Sec. 314. Indian employment credit.
Sec. 315. Accelerated depreciation for business property on Indian reservations.
Sec. 316. Railroad track maintenance.
Sec. 317. Seven-year cost recovery period for motorsports racing track facility.
Sec. 325. Extension and modification of duty suspension on wool products; woolresearch fund; wool duty refunds.

Friday, October 3, 2008

Lean Six Sigma

I stopped collecting initials many years ago. You know the ones I mean, the certified this or bonafide that. There's nothing wrong with those initials. In fact, it's helpful for organizations to standardize a body of knowledge. It certainly simplifies training and communication in general. I just realized that at some point, it was getting silly. For instance, I have a Master's Degree from an Ivy League school in Engineering Management. Do I really need to go through the process to become a certified engineering manager? I don't think so.

I confess that I am an ASQ Certifed Quality Auditor (CQA). I needed to learn more about how to perform effective audits, so I did. I took a course offered by ASQ, and stuck around to take the exam as well. I'm proud of that certification, but it was just an extension of the learning.

I have decided to expand my skillset more, and so will be collecting a couple more initials. I recently enrolled in a Lean Six Sigma Black Belt program. I've used the tools for years, but think it's time that I formalize that knowledge and expand my skills even more. I'm really looking forward to it!

There have been some recent criticisms of Six Sigma. I recall a Business Week article claiming that Six Sigma stifles innovation. There is some truth to that, and in response, there have been several new initiatives such as Design for Six Sigma. In addition, Six Sigma practitioners have been bringing forth many new, and some old, innovation tools, such as TRIZ.

I'm excited about the program. I'll keep you posted as I move through the program, which starts in November. If you're a Six Sigma practitioner, will you please share a brief synopsis of your project(s)?