Archive for June, 2017
I have written in the past about the pride some of our customers have in buying the cheapest products available on the market today, and we talked about how for some reason some companies feel that they can buy the cheapest parts they can get their hands on and then turn around and tell their customers that their products are the best in the world. Now we all know how impossible that is, no matter how much you try, no matter how much hype you try to give it, you just can’t make filet mignon out of chuck steak it just doesn’t work, why, you should just as soon try to make a first in class MRI using the cheapest parts you can find.
Look anyway you cut it, cheap is cheap and cheap is inferior and no amount of spin is going to change that. With that in mind I thought it would be interesting as well as informative to remind you what you get when you go cheap, when good enough is good enough. I thought it would be beneficial to describe the true costs of buying cheap. So I have listed below the true costs that occurs when a board is late; or when it is rejected and returned to you by the customer; or what it costs to remake a board or worst of all the true costs of a field failure.
For those of you who like to bury your head in the sand when buying as cheap as possible I would warn you to turn away, this is not going to be pretty.
What does a late board cost?
Customers who buy quick turn PCB’s do so for a reason. They need their boards on time they need them when they need them and they are willing to pay a premium for that service
If a QTA board is late to the customer:
- The customer’s schedule is also late
- He misses his date to his customer
- He can miss his revenue projections
- He can spend more money on overtime to get the boards assembled on the weekend
- She has to make other plans and pay twice for the boards
- She could miss product introduction
- He could miss having the product at a trade show
- She could miss time to market and lose out to her competitors
- He can hold up a million dollar shipment for few thousand dollar circuit boards on which he saved a few hundred dollars…was it worth it?
- The buyer loses credibility with his team
- The customer loses credibility with their customer
If a board is rejected and returned by the customer
All of the above issues apply, but on steroids, everything is worse
- It takes additional time to get deposition. That’s why getting CARS in time is so important
- You Lose all the time to make new boards
- You customer Increases chances of missing time to market goals
- There are increased problems for you as well. You lose credibility
- You have to replace the boards faster than ever and for free
- You have increased chances of screwing them up again because you are building them under duress
- It hurts your reputation
- It hurts your chances of getting more business from that customer.
- It hurts your customers chances of getting more business
What does a remake costs?
If you think about the repercussions of losing a part number and having to rebuild it the cost can be exponential. Especially when you specialize in Quick turn PCBs. Think about it:
- The cost of that lot to begin with. The materials, labor and time
- The cost of the rebuild, the materials, labor and time
- The opportunity costs. This remake is taking up a slot that could have been used for another customer.
- If the boards are late or you can’t build them in time to meet the delivery date then:
- There is loss of premium dollars.
- You’ll be paying more for shipping the late boards
- You’ll lose the customers good will and possibly lose the customer
- The loss of your reputation as a great QTA company which can be discouraging to your associates.
- The loss of the ability of your sales people to get more business from that customer.
- The loss of customer confidence in us
- Then there is the customer, what is the loss to him for us not giving him his product on time. His loss can be huge:
- Loss of revenue because the customer cannot ship then end product which is often worth thousands of dollars more than our boards
- The possible loss of premium dollars he paid to get components and other commodities in quickly to make deadline
- The loss of labor time as he brings in people to work on the PCBs which are not there.
- The loss of his reputation
- The loss of time to market which is so important in new product development
- The possible loss of marketing expenses. Marketing that claimed that his product would be delivered on a set date.
To miss a delivery date is a very big deal at any price Customers pay premium dollars for a reason and often that reason is all about time.
What field failures cost?
- All of the above on double steroids
- Extremely high visibility (Challenger/ New Boeing Dreamliner)
- Lives possibly lost. It can be life or death literally!
- Medical? Think about it do you want field failures of medical devices
- Can literally destroy your company’s reputation and put you out of business
So think about these things the next time you are tempted by price, the next time you feel that buying that cheap board from Asia, you know the one, the one built buy the cheapest labor money can buy and still not be slavery and ask yourself if this is really the only price you’ll be paying; or if you’ll be paying a much higher price in the end. And then ask yourself if you’re really proud that you were able to use the cheapest parts that money can buy to put into your great product. Are you really proud of that?
It’s only common sense
A book recommendation from Dan Beaulieu.
Redefining Operational Excellence: New Strategies for Maximizing Performance and Profits Across the Organization
By: Andrew Miller
What’s the problem with Lean manufacturing? What’s the problem with Six Sigma? Easy–they don’t include people. They take into consideration only processes rather than people. They are only a small component of operational excellence rather than the entire solution.
According to Andrew Miller in his book, Redefining Operational Excellence: New Strategies for Maximizing Performance and Profits Across the Organization, “Operational excellence is about empowering employees to use judgment on the front lines. But often an organization uses methodologies that preclude having to use judgment. The methodology (Lean or Six Sigma) becomes a crutch.” And to me, said methodology creates a “leave your brains at the door” mentally when it comes to people. And this is why I love this book.
Full disclosure: I’ve always been vehemently against any process methodologies that attempt to “lobotomize” and “robotize” people. I am a great believer in people and the amazing things they can accomplish. I’ve always believed that Six Sigma, Lean, and every other theory-of-the-month ideologies were bad for business so that’s why I am in full agreement with Miller.
When I saw this book come across my desk, my first reaction was, “Here comes the next version–the latest ideology-of-the-month.” But once I opened the book I honestly could not put it down. This guy makes sense. This guy has brought the people to the table, which is what has always been needed.
Miller had me from the very first paragraph when he writes, “Operational excellence is the relentless pursuit of doing things better. It is not a destination or a methodology but a mindset that needs to exist across and organization. Operational excellence is not about perfection or performing activities. It is about dramatic improvements and financial growth.”
I believe that the author has it right when he says, “Fix the process, then implement the technology.” So many times we want to implement new technology into a flawed process. It just doesn’t work. If the basic structure is not sound, technology will only allow you to make “bad decisions faster.” Why don’t people get that?
One of the biggest problems with programs like Lean is that it wants to treat everything as though they are the same. It assumes that the people and customers are the same, which they are not.
“Instead of focusing on standardization, organizations need to focus on customization. Every customer is different and requires a different solution. Organizations need to focus on learning more about their customers and on collaborating with them to provide the best solutions.” And to that I say a big amen and thank you to Miller.
If you agree with what the author is saying in his book, you need to read it to get the facts and strengthen your arguments against the “Leaners” in your organization. If you find yourself not agreeing with his theories, you’d better get out there and get this book right now because it’s critical to you, your career, and your organization that you see the light, and sooner rather than later.
To succeed in business today especially a custom business where you’re making products based on not your designs but the customers’ designs you have to be flexible. You have to listen to what your customers want today and what they are going to need tomorrow and customize your offerings to meet those needs.
This concept is pretty straight forward you are in the business of providing your customers with the products they need, with the products that they have designed so that they can produce their end products. It’s not rocket science…er well in some cases it is when you consider our business. So its Important we don’t niche ourselves out of the market.
Winning new customers is a long, time consuming and expensive process. You have to invest lietrally thousands of dollars on every new customer you attain. So once you have that customer you have to do everything to nurture your relationship with him, you have to do everything in your power to keep that customer. The better you are at this the better your company will do. The more long lasting customer relationships you have the longer you will successfully stay in business.
So then why would you not grow with your customers? Why would you not do everything in your power to provide these good hopefully customers for life with everything they need to stay your customers for life?
And once again we get back to understanding what your customers’ needs are today and what they are going to be in the future and then adapting your company’s offerings accordingly.
This means asking them to share their technology road map with you. This means asking them to share their future plans for their future products with you. This means asking them what they are going to be looking for from you as a supplier in terms of Quality, Technology and other special capabilities in the future. If you are willing to do this and if with great honesty, sincerity and credibility you can express to your customers that you are in fact willing to do this, they will be happy to work with you helping you to set up your company to work with their company in the future.
This means that if whatever direction they are heading in you will be there for them
If in the future they are going to need boards with very fine lines you are going to be there for them.
If in the future they are going to need flex and rigid flex boards you are going to be there for them.
If in the future they are going to need boards with CTE materials you will be there for them
And if they are going to need something that is impossible for you to provide say for example large volume orders at the best value possible you, as their PCB expert provider will find a source for them and if you have a been a true partner they will want you to handle that source. Since you’re selling service, credibility and trust and solutions there is nothing wrong in fact there is everything right in your providing your customers with all the solutions they need even if you have to sub out the ones you do not directly provide yourself.
If you can do all of these things. If you can offer your very good customer partners on complete one source solution you will succeed, you will have customer for life and you will become your industry’s “go to” supplier for all of their PCB needs.
And here’s an added bonus, just a little secret here for you to consider; no one is doing this at this time. We are all so niched out that we are limiting ourselves in terms of what we can provide or should I say allow ourselves to provide to our customers. There are many cases right now where the customers particularly the high end customers are looking for some to handle all of their PCB needs. They just want someone they can rely on to handle our product for them. Now I warn you these high end customers and the current world game changers to they are very demanding and their needs hard to keep up with. In some cases their board requirements can be beyond what most board shops can handle but I don’t look at this as a stopper but rather an opportunity for a good open minded board provider to instill itself as their board supplier, to act as their true partner into the future and with great patience, deliberation and endurance find a way to meet their needs and help them to create the products that are yes in fact actually putting a dent in the universe.
Those PCB companies who are willing to do that are the companies who are going to be around for a while joining these companies of the future in that future. Its only common sense
To be great leader, you have to have courage. The courage to do what needs to be done. The courage to take that giant leap forward when you know the time is right. The courage to fire someone when that person is no longer right for the job. The courage to sacrifice one person for the good of the rest and for the good of the company. The courage to stick to the company’s values even when it hurts. The courage to put the customer first even when it hurts. The courage to invest in the future even when you don’t have all the resources you need. The courage to do the unpopular thing, when no one else will do it. The courage to stand up for what is right even when it is unpopular. The courage to put the good of the company above all else. The courage to admit when you are wrong. The courage to be different. And finally, yes, the courage to leave the company when you know it is time for someone else to take over.
Courage is an easy word to say but a very difficult quality to have. If you have the courage and the energy to execute that courage then you will be a great leader. Because courage takes energy. It takes energy to get out there and fight for what is right every single day of your life. It takes energy to work with your team and tell them over and over again what they need to do.
Leaders who exemplify courage are leaders who inspire. They inspire their own people to be brave and to be courageous. They encourage their teams to do what is right. The adage that goes: you have to talk the talk and walk the walk is never truer than when a leader wants to instill his team with the courage to do what is right
If you strive to be a great leader, one who exemplifies courage and exudes inspiration, here are a few questions you need to ask yourself.
- Do I listen to other people? Do I listen intentionally and try to really understand what they are saying?
- If I think that I already have a solution to a problem, will I listen to my team just to make sure it is the best solution?
- If they come up with a better solution, will I have the courage to change my mind and go with their solution?
- Am I open to having honest conversations with my associates, encouraging them to speak their minds, even to the point where it hurts?
- Do I have the courage to stick to my guns when it comes to making a decision that is right for the customer and is ethically right as well, but in the end, could hurt our company?
- Am I willing to do difficult things for the sake of the company?
- Do I have the courage to fire a once valuable employee who is no longer cutting it? Even if he is a friend?
- Do I have the courage to stand up for what is right? To stand up and speak out and try to do something about it, even though my stance is tremendously unpopular?
- Do I have the courage and the energy to work day after day, saying the same things over and over again until the right kind of change comes to the company?
- Do I have the courage, to stop a project and admit we made a mistake when it becomes evident that the project is not going anywhere?
- Do I have the courage to reach out to the fellow company owners in my industry when I feel that a partnership could be for the good of the industry?
- Do I have the courage to take my pretty good, pretty well-run company and change it to make it great?
- Am I willing to accept someone else’s idea even if it is diametrically opposite of my own, but if it has merit?
Please read these questions carefully and then answer them honestly. What do you think? Do you have the courage that you need to be a good and inspirational leader?
Here is a quote from Kristi Hedges’ excellent new book, The Inspiration Code: How the Best Leaders Energize people every day.
“Courage isn’t an abstraction but a series of discrete, smaller choices one makes that build courage. We can try courage, trust courage, and tell courage… Courageous leadership requires clear choices, saying no to some opportunities to be able to say yes to some others….Courageous moves that are desired from leaders include the courage to have honest conversations, prioritize purposes, be real, lead by values, jump, and let go.”
Certainly, there are other values that contribute to the make-up of a great leader, but without courage there can be no great leadership. It’s Only Common Sense.
A book recommendation from Dan Beaulieu.
Leadership (The Brian Tracy Success Library)
By: Brian Tracy
I have read all of the books in Brian Tracy’s Success Library and found them all equally useful as well as readable and interesting. What I like about his newest book is that everything you need to be a great leader is right here in this very short, but very concise, volume.
From learning how to be a leader:
- Be action oriented;
- Have a vision;
- Have a plan;
- Know where you are going;
- Lead by example.
With just a few minutes reading, Tracy allows you to discover all you need to develop into a strong leader.
But hold on–this book is much more important than that. This is what I call a “right-hand drawer book.” It’s the kind of inspiration stimulation tool you refer to again and again as you develop into a true leader.
Here, for example, are Tracy’s four basic steps to becoming a better leader:
- Do more of certain things. Do more of those things that are of greater value to you and more important to achieving your results as a leader.
- Do less of certain things. At the same time, you must deliberately decide to reduce the amount of time you spend on certain activities that impede your success as a leader.
- Start to do those things you aren’t doing that you need to be doing. What are the skills, competencies, or knowledge that you need to succeed as a leader? Identify them and then either acquire them or learn them.
- Stop doing certain things altogether. There may be certain activities that are no longer relevant to your goals as a leader…what was once important is no longer important and should no longer take up your time.
From the chapter on how to handle yourself in a crises:
- Stay calm;
- Be confident in your abilities;
- Dare to go forward;
- Get the facts;
- Take control;
- Cut your loses;
- Manage the crises;
- Communicate constantly;
- Identify your constraints;
- Unleash your creativity;
- Keep things simple;
- Never compromise your integrity; and
- Persist until you succeed.
I know that many of us have heard and read these things before, but, then again, the truth is the truth and great is advice is just that–great advice. I look at this particular chapter as that fire extinguisher behind the glass you break in case an emergency or, in this case, a crisis.
I can say with one 100% honesty that I’ve used Tracy’s books in this way. I have used them as an emergency tool when I get intoa jam. I just take a deep breath, open my right-hand drawer, and read through the appropriate book until I find something that helps me to find the solution. You should try it…it works.
Man, how many times I am going to have to say this? For those of you loyal readers who have been checking out this column for years I apologize in advance and won’t blame you if you want to sit this one out because you’ve read it all before right here and yes too many times. But I can’t help myself; every time I think that people have gotten the message I am proven wrong. Every time I think the times they are a changing I am disappointed, discouraged and then finally angry. Angry because some people still are not getting. So here we go…and I wish I could promise you that I am going to say this one last time, but I somehow doubt it. Instead all I can promise is one more time for now. Yes you need sales people! The biggest problem that every board shop I talk to has is lack of sales, not enough sales, not enough customers. Not enough new business, not enough backlog, not enough new customers. But then when I ask them how they are selling they say things like, “Oh word of mouth.” Or “People know who we are.” Or this beauty, “We’ve had the same customers for years they are not going to leave us.”
When I ask them about sales people they will tell me that they have had some in the past but they just didn’t work out. Or they don’t believe in sales people. Or my personal favorite as soon as they buy a drill or a router or a press they will hire some sales people. And then I sit there scratching my head wondering how that is going to work?
Let me see. You don’t have enough business so instead on spending some money on sales people you are going to buy a piece of equipment for the same amount of money of two or maybe even three good sales people for a year. Then I have to wonder, what are you going to do with the equipment? You don’t have enough business now but you are going to spend from a quarter to a half to three quarters of a million dollars for a piece of equipment that is going to sit idle because…can we say it all together you don’t have enough business!
Now you guys who sell equipment don’t get your knickers in a knot I am a great believer in investing in your company by buying new equipment. But you have to admit it would be nice if your customers had the right amount of business to use on that new equipment. Maybe your customer base would be up around twelve hundred like it was in the good old days instead of a little over two hundred a number that is so small that some of you are leaving and going to China and the rest of Asia like those proverbial rats of that sinking ship.
Look guys it doesn’t take a rocket scientist, and now that I think of it some of you are probably rocket scientist to figure this out. If you don’t have enough sales you have to hire some sales people…or at least one to get the ball rolling. And I mean a real sales professional a man or woman who has a proven success story a sales professional who is going to be able to get you some business. And frankly a sales professional you are going to have to pay like a professional. Don’t try to skimp, don’t try to convince them to work on commission only for a while until they get some business and then you’ll give them a salary….really?really? That is just plain stupid. Would you ask that of a production manager? Would you ask that of an engineer? Would you ask that of well of yourself? Then why the heck do you think a sales person would be willing to take that deal? It just doesn’t make any sense.
So now listen to me and listen very closely because if you do and you heed my advice I won’t have to write this one more time, maybe this even will be the last time. Ready? Okay hear I go, here are my pearls of wisdom:
You don’t have enough business. I to get more business you need to have sales people, feet on the street, people calling companies and getting them to buy your products. And the good ones costs money. They will not work for minimum wage, they will not work for commissions only, and they will not work at a salary for six months with the promise of it being cut in half in six months. No they are professionals, they need to be treated as professionals, they need to be paid as professionals and they need to be respected as professionals. And guess what if you hire a good professional sales person you will get some business… and yes that’s only common sense
In order to successfully market your company, you have to make sure that your company is marketable. You have to have something to market and that is the entire customer experience not just the product. Yes, you can have a great product but if you don’t treat your customers right when they are buying that product they will go somewhere else.
What good is it to have the best product on the market if your customers hate dealing with you so much that they will not buy it from you? The original Apple M3 player, the original IPod, was not the best on the or the first player on the market, but it was the easiest to use and Apple was the easiest company to deal with, not to mention, probably the most fun.
Thinking about marketing, and making yourself an attractive company to your customers and would be customers, here are ten things that will help you develop and implement the best marketing plan in your industry:
- Make sure you are customer focused. Business is not about you it’s about your customers. Always work at figuring out their needs and then meeting or exceeding those needs.
- Digging deeper, define exactly who your target customers are and what it will take to win them, develop an ideal customer plan.
- Check out what your competitors are doing. The best place to find what is going on in your marketplace is to monitor what your competitors are doing. You don’t have to imitate them but you can study them in terms of what is working and what is not. This is a also a good time to discover what solutions are not being provided and provide them.
- Marketing is all about planning., You have to plan for the future, not just today, but next week and the month after that and the year after that. You should develop an ongoing live marketing plan and live with it every day, making adjustments, as needed.
- Make sure that all of your company’s policies are customer friendly. Go over them and make sure that in all cases they are not offensive to your customers.
- Develop your company’s story and make sure that not only everyone in your company knows it but that everyone in your market knows it as well.
- From this story develop your brand and from your brand develop your advertising.
- Pay attention to your advertising, yes I know you think you do but most of the time all you’re really doing is talking about how much you spend on advertising. Let me give you a hint, whatever you are spending on advertising is not enough, you should be spending more. If you truly intend to be the leading company in your industry then you have to make sure that everyone in that industry knows what you do and why you are the best at it.
- Always be selling and always be marketing. Without customers, you will have no sales and without sales you will have no company. That is all there is to it. You can buy all the equipment you want, you can have all the technology you think you need but what good are those things if you don’t have any customers?
- Use any tool you can to help your sales and marketing team. This includes social media, value content newsletters, lunch and learns, seminars and webinars and whatever other new thing comes down the road. Do anything, learn anything, buy anything that will give you an edge over your competition when it comes to getting your name out there.
And one more, always under promise and over deliver. Make sure that everyone in your company is on board with your marketing effort. That everyone knows and respects your customers and considers the customer in everything they do. Empower your customer service people to be on the customers’ side. Give them some latitude to make the right decisions when they are dealing with customer issues. In short, have everyone ready to put the customer first at all times.
Great marketing, great customer service and great sales service are all key ingredients in developing and sustaining a great customer focused company. Pay attention to this and make sure you are always purposely driven in your sales and marketing efforts, and in the end, you will have an industry leading company.
It’s only common sense.