Archive for the ‘Improvement of Fixed Costs’ Category

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When CIOs and IT managers start wondering about how to effect Lean Improvement and cut wastes in their departments, the big possibility is lying right under their very own noses – Software Licenses!

Many large companies, and even medium sized companies these days, have volume licensing with companies like Microsoft. When a new employee joins, quite often there is a new PC and all desktop software like Office and sometimes diagramming tools, graphic design tools and project management software may be installed on this machine, each one taking a license off the approved list of licenses that company has with the vendor.

Unfortunately, the ugly, unspoken truth of many companies is that when the employee leaves, the disk is formatted and the PC may be recycled for another employee with installation taking one more license all over again!

With hardware it is even worse. Of course, 5 year or even a 3 year old computer hardware is hardly useful but the amounts of money spent on buying new hardware while another department is cutting back on employees and freeing hardware is often is not considered carefully.

Many large companies are implementing Asset Management software that can reclaim and reuse hardware and software wherever they can and that’s a very useful Lean Improvement project that one can undertake.

In fact there are many vendors like Redbeam that can serve even smaller companies cut waste in IT departments, especially on Hardware and Software that need not be spent money on!

Make less, buy less, use less, throw away less. – Akiko Busch


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Producing Business Intelligence has always been thought of as a linear process where, you have at the beginning of a the BI process, all the data, then it gets cleaned; then you populate your data warehouse and then you do your reports. The reports are then of immense use to you!

Hardly works in real life! In fact, truly useful Business Intelligence lies in Excel Spreadsheets and skunkworks projects within companies in many departments. Yes. There may be a central Business Intelligence effort, but frustration with getting precisely the information they needed at any time in the forms they need, has always been the achilles’ heel of many BI efforts within companies, especially larger ones.

I ran across a novel way of thinking about this whole process. What if you just had all the data sources available to you somewhere and you assemble in the form of a flowchart, your own unique Business Intelligence mashup including Geographic, Demographic data as needed? What if you could just drag and drop these components on the screen and you get the new kind of mashups you need?

SRC is a company that makes a product called Alteryx that enables this kind of Business Intelligence.

What is interesting about this product is that it first of all, it serves customers better! Consumers of Business Intelligence for the most part do not know ahead of time all the different kinds of Business Intelligence they need and what data needs to be collected and stored in the first place.

Add to it, the waste of human effort, and time spent on monolithic Business Datawarehousing, and Business Intelligence efforts. This is not to talking about waiting for IT resources to free up to work on  the precise kind of reports you need for your work!

By making it easy for consumers of Business Intelligence to do a lot of the assembling and analysis themselves, it makes for a Lean form of Business Intelligence effort within the company.

With the amount of Geocoding, Demographic and other location-related data available for many countries in the world in great detail, tools like these enable a Lean form of Business Intelligence, cutting a lot  of wasted efforts within large companies. For small and medium sized companies that do not have large IT departments, of course, something like this is a natural!

You can observe a lot by just watching – Yogi Berra

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The only thing sure about usernames and passwords are that they are not only totally unsafe and do not work well in practice, they are anything but Lean in practice! They can be solid in theory but in practice they are anything but!

An unwritten secret of any company or any individual is that a lot of usernames and passwords are written on post- it notes or stored digitally somewhere on a computer.

Unfortunately for users, every software product and company thinks that they are coming up with the most foolproof system of user authentication. They all make it so convoluted and painful for the end user. With usernames and passwords for everything like your office computer, PC at home, office related websites, personal websites, banks, retirement account financial websites, etc, everybody has tens of usernames and passwords. Many of them use different security restrictions and requirements for safety resulting in a lot of confusion in the minds of users. They cannot but write them all somewhere or store them digitally on a computer system. Who can remember all these usernames and passwords when you have so many?

As if these were not enough, different organizations waste everybody’s time and energy requiring these passwords to be changed periodically. Of course, users will forget their new passwords, they need to waste time either talking to someone on the phone or email or go figure it out with a “Forgot password” link on a website somewhere.

What a waste of human effort, time and effort when the safety can be achieved in other ways that are simpler for everyone to remember and use?

This is where single-sign ons have lean benefits for the user as well as the organization. Single signon regimes like the ones from Microsoft and OpenID can be very beneficial. You can enforce even changing the password periodically as long as it is a couple of passwords, not the tens of usernames and passwords as before.

Social networking sites like facebook allow their username and password to be used by many, many businesses and content websites now.

Finally, the online world of User Authentication has caught up with the pain of people and organizations!

Too much sanity may be madness – Miguel de Cervantes Saavedra

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My credit union doesn’t want me to come in and bother them if I have a check to be deposited in my account. If I have a scanner at home and access to the Internet, I can just deposit my checks from home!

It saves me a trip to the bank, time, gas and the opportunity to do something else useful. For the bank, I am doing all the work. They don’t need me showing up at the branch needing time on their part to do the work I can do from home.

Chase Begins Converting Its ATM Fleet to No-Envelope Machines reports Bank and Technology. You can now deposit up to 30 checks in one go along with cash also in a Chase ATM.

They are trying to do away with Deposit Slips and that’s a great Value-added improvement for consumers as well as a lean improvement for banks.  For the consumer, they get a scanned image of the check in the receipt as well as money that is available sooner because the intermediate step of somebody at the bank manually opening these envelopes and processing them is totally eliminated.

Businesses seem to be benefit even more because they don’t need to write a big deposit slip with thirty or forty checks each time. The ATM can just easily scan it all and print out a receipt with all the images.

In addition, it appears that the bank has eliminated fraudulent transactions where someone deposits their own checks into their own accounts and if that bank allowed withdrawals immediately, got the money out!

Great example of a Lean Improvement in check processing that is a win-win for everyone, except perhaps for the people not needed anymore to process these transactions at the bank!

Any general statement is like a check drawn on a bank. Its value depends on what is there to meet it.  –  Ezra Pound

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Finace and Accounting processes in a company belong to a whole class of non-value adding activities, if you really think about it. They are needed by the regulatory authorities, shareholders and other stakeholders that have business with the company but for the life of me could not think of one way in which it adds value to me, the end customer.

How Ford Motor Company does its Finance and Accounting function has very little to do with the value it is adding to the Ford car I am thinking of buying!

It is interesting that even large companies like Dell and Cisco spent time thinking about how to make the Finance and Accounting function leaner.  

What they found was interesting. They unearthed lots of unnecessary processes and wasted human effort in all of their financial forecasting and regular accounting functions.

The surprising result of all of this is the elimination of a lot of unncessary reports.

As anyone who has watched the movie OfficeSpace and/or worked in a middle management or lower position in any company, we all know the reports we need to fill out periodically that we were convinced wasn’t going to be useful to anybody within the company.  

Time wasted in useless reports so satirized in OfficeSpace that people have designed coversheets for Initech T.P.S Report as a joke! IniTech is the fictitious company that features in the movie.

But seems like wasted human efforts and unnecessary reports are a reality in the world of Finance and Accounting and companies have found a lean approach to eliminating them!

But if you have not seen OfficeSpace yet, do not miss it! It’s widely available on DVD!

There’s no business like show business, but there are several businesses like accounting. – David Letterman

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Lean and Research and Development (R&D) don’t seem to fit together.

Lean is about cutting waste in effort, unnecessary movement and making sure anything you do adds value to the end customer.

Research and Development is about conquering new frontiers in Scientific Exploration, and in Industrial settings (Not academic), turning that research into Innovations, Advanced Development and Products.

In theory,  they could be poles apart. In practice, not quite!

We have all heard of legendary stories of very good research and advanced development not really making money for the company that invested in that research. Xerox PARC (Palo ALto Research Center) is famous for inventing the computer mouse but Apple was the company that made it into a commercial product. Corporate histories are laden with beauracracies totally killing innovative ideas.

The latest one is that General Motors spending millions of dollars developing an electric vehicle EV1, making many succesful production versions of it, leasing them, but buying every one of them and crushing them! There is a whole website devoted to this colossal waste of effort. money, research and innovation! . Now they are talking about producing an Electric Car! They had one and they threw it away before!

You might be surprised at the amount of money spent on R&D by companies that does not make a dime for the company. There is research for research’s sake but there are many companies that turn research ideas into products, ready for production, only to be killed by politics, economics or some other consideration!

Making sure that all your efforts at R&D are turned into something useful for the company is itself, Lean!

In addition, there are lots of others things companies can do for Lean R&D. Laboratories can be shared, resources can be shared by many research groups, cutting waste in the process.

There are some recent examples of how Pharmaceutical Companies have rationalized and Leaned their drug discovery efforts even! These are very large, very risky, very expensive projects and it only makes sense that you at least do not waste resources, efforts and the final outcomes are what you want as a corporation! 

Whoever thought that Lean and R&D could actually make sense together!

Misery acquaints a man with strange bedfellows. – William Shakespeare.

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My daughter had an outpatient surgery for half a day on her knee. A ligament had torn off and had to be tacked back on.

Her total billing to the Insurance company was a whopping $44,000. The insurance company paid $33,000.

She was one of 10 or so people scheduled for surgery that day and by no stretch of imagination can we see this costing $33,000 mush less $44,000! These were just what they called “Incidental Expenses”.

If you think that there is nothing wrong with this picture and healthcare in the U.S is alive and well, you should be delusional! We all blame the insurance companies but someone billing these atrocious amounts, just because “Insurance pays” is not doing any one great service.

Seems like the whole thing is a racket that can use a lot leaning. The first initial Leaning seems to be bringing a sense of honesty and fairness to the whole thing! Then we can think about other ways to reduce waste. If the whole thing is a made up number out of thin air, then lean methods may fail miserably!

For our own’s sake, the best Lean Healthcare is Prevention and not to fall sick, ever!

Honesty is the first chapter in the book of wisdom – Thomas Jefferson

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